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CLARENCE  ADDISON  DYKSTRA 


THE   GREAT   SETTLEMENT 


THE 

GREAT  SETTLEMENT 

BY    C.    ERNEST    FAYLE 


WITH    MAPS 


NEW   YORK 
DUFFIELD   AND   COMPANY 

i9r5 


PREFATORY   NOTE 

As  a  Trustee  of  the  Garton  Foundation  I 
gladly  say  a  word  to  those  who  may  read  Mr. 
Fayle's  thoughtful  book. 

The  Foundation  invites,  as  it  has  always 
done,  academic  discussion  of  questions  relat- 
ing to  War  and  Peace.  It  has  never,  as  a 
Foundation,  expressed  disapproval  of,  or 
concurrence  with,  the  views  of  those  who 
have  written  or  spoken  under  its  auspices. 
Free  discussion  was  the  atmosphere  in  which 
the  Foundation  was  born  and  lives. 

I  am  not  concerned  with  Mr.  Fayle's  pre- 
sentment of  historical  facts  or  with  his  deduc- 
tions. For  the  ability  and  clearness  of  his 
statements  he  alone  is  responsible. 

My  views,  if  they  interest  any  one,  I  share 
with  the  majority  of  our  countrymen.  The 
German  cult  and  German  methods  are  alike 
abhorrent  to  me.  Since  we  have  been  forced 
to  draw  the  sword,  I  would  never  willingly 
sheathe  it  till  both  are  in  the  dust.     If  the 

V 

665034 


VI  PREFATORY   NOTE 

free  nations  of  Europe  consent  to  a  Peace 
under  any  other  conditions  it  will  be  no 
Peace.  Our  children  and  our  children's  chil- 
dren will  then  have  to  suffer  again  what  we 
are  suffering  to-day.  Our  struggle  is  not  only 
against  a  military  caste.  It  is  a  fight  to  the 
death  with  a  nation  steeped  in  odious  fal- 
lacies, bred  on  hateful  dogmas,  and  imbued 
with  a  false  philosophy  of  life  and  its  aims. 

Peace  can  only  be  the  outcome  of  victory 
or  exhaustion.  When  the  point  of  discussing 
terms  has  been  reached,  when  the  machinery 
for  ensuring  tranquillity  in  Europe  has  to  be 
fashioned,  the  settlement  will  be  in  the  hands 
of  men  entrusted  with  tremendous  powers, 
but  only  more  or  less  adequately  equipped 
for  the  task.  Let  them  ponder  beforehand 
upon  the  lessons  of  history,  reflect  upon  the 
mistakes  of  their  ancestors,  and  examine  the 
varied  aspects  of  the  problem  they  will  have 
to  solve.  Mr.  Fayle's  book  is  a  most  able 
contribution  to  such  an  inquiry. 

During  the  war  I  have  lived  much  with  the 
French  Armies  and  among  the  French  people. 
There  is  no  soldier  of  France,  and  very  few 
of  her  men  and  women,  to  whom  the  issues 
at  stake  are  not  pellucidly  clear. 

Their  agony,   and  sacrifice   of  wealth,   of 


PREFATORY   NOTE  Vll 

blood,  and  of  life,  are  not  laid  upon  the  altar 
of  ambition.  They  are  not  offered  for  terri- 
tory or  power,  for  commercial  predominance 
or  to  impose  French  ideas  upon  mankind. 
They  are  a  contribution,  by  France,  of  her 
youth  and  manhood,  of  the  tears  of  her 
women  and  children,  to  the  cause  of  freedom, 
and  the  inherent  right  of  free  races  and  free 
nations  to  live  their  own  lives  in  their  own 
manner. 

This  is  the  supreme  objective  of  the  war. 
No  diplomatic  compromises,  no  shuffling  of 
the  European  cards,  no  redrawing  of  the  map 
of  Europe,  in  the  narrower  interests  of  this 
or  that  Great  Power,  that  fails  to  secure  it, 
will  prove  to  be  more  than  an  armed  and 
minatory  truce. 

Esher. 

France, 
April  1915. 


AUTHOR'S  NOTE  TO  AMERICAN 
EDITION 

It  may  be  asked  why  Americans  should 
interest  themselves  in  the  details  of  what  is 
likely  to  happen  in  Europe  at  the  close  of 
the  present  war.  The  answer  to  this  question 
is  to  be  found  in  the  history  of  the  war  itself. 
No  conflict  on  the  present  scale  can  be 
waged  in  Europe  without  profoundly  affecting 
American  interests,  and  it  is  of  the  first 
importance  to  America  that  this  stupendous 
conflict  should  be  followed  by  a  real  settlement, 
giving  reasonable  hope  of  security  and  perma- 
nence, and  not  by  a  mere  patched-up  truce, 
containing  the  seeds  of  future  wars  no  less 
gigantic  and  devastating.  It  may  seem  to 
matter  very  little  to  a  citizen  of  the  United 
States  whether  an  odd  million  or  two  of  Serbs 
and  Croats  should  remain  under  the  Austrian 
Crown  or  be  united  to  their  independent 
kinsmen,  but  it  matters  immensely  to  Ameri- 
cans whether  the  future  is  to  see  Europe 


it  AUTHOR'S   NOTE   TO   AMERICAN   EDITION 

peaceful  and  productive,  a  good  market  and 
a  good  neighbour  ;  whether  the  sanctity  of 
international  law  is  to  be  strengthened  or 
destroyed  ;  whether  the  policy  of  the  Euro- 
pean Powers  is  to  be  guided  by  considerations 
of  justice,  by  the  conception  of  international 
co-operation  for  world  development,  or  by  a 
dream  of  conquest  and  domination.  Not 
only  the  interests  of  American  commerce, 
but  the  course  of  American  policy  and  arma- 
ments must  be  determined  to  no  small  extent 
by  the  future  development  of  Europe,  and 
that  development  depends,  not  perhaps  upon 
each  detail  of  the  settlement,  but  upon  the 
principles  which  underlie  whatever  arrange- 
ments are  effected. 

It  is  this  question  of  the  underlying  prin- 
ciples which  is  the  crux  of  the  matter.  It  is 
not  likely  that  all  the  problems  discussed  in 
this  book  will  be  finally  settled  at  the  peace. 
But  upon  the  spirit  in  which  they  are  ap- 
proached will  depend  the  future  policy  of  the 
Powers  and  the  possibility  of  gradually 
settling  those  questions  which  remain  out- 
standing. It  is  because  it  treats  of  the 
principles  underlying  each  separate  problem 
that  this  book  is  offered  to  American  readers. 

The  book  is  written  by  an  Englishman, 


AUTHOR'S   NOTE   TO   AMERICAN    EDITION  Ml 

and  to  those  whose  studies  have  lain  chiefly 
in  the  history  of  the  New  World,  with  its 
clear  fields  for  experiment,  it  may  seem  to 
lay  overmuch  emphasis  upon  the  limitations 
imposed  by  circumstances,  by  the  dead-weight 
of  the  past,  by  historical  associations.  But  if 
Americans  are  to  understand  not  only  what 
is  desirable,  but  what  is  possible,  in  the 
shaping  of  the  Europe  of  to-morrow,  they 
must  take  account  of  these  limitations.  It 
is  certain  that  they  cannot  be  ignored  by 
those  in  whose  hands  the  destinies  of  Europe 
will  lie.  We  shall  be  dealing  with  States 
in  very  varying  stages  of  development,  with 
those  like  France  or  Britain,  who  have  been 
among  the  leaders  of  civilisation  for  centuries, 
with  those  like  Russia,  whose  history  as 
members  of  the  world  community  lies  largely 
before  them,  States  united  by  historic  friend- 
ships or  divided  by  age-long  feuds,  having 
policies  and  desires  stretching  far  back  into 
the  past.  The  vital  concern  of  America  in 
European  conditions,  the  possibility  of  her 
entrance  into  that  World  Alliance  which  is 
the  subject  of  the  concluding  chapter  of  this 
book,  render  these  considerations  of  practical 
politics  of  living  interest  to  Americans. 
The  author  can,  of  course,  speak  only  for 


IV  AUTHOR  S   NOTE  TO  AMERICAN  EDITION 

himself.  But  he  believes  that  this  book  does 
substantially  represent  the  views  of  a  very 
large  section  in  this  country  who  look  forward 
to  the  victory  of  the  Allies  not  only  from 
motives  of  patriotism,  but  because  it  seems 
to  them  to  afford  a  hope,  in  the  words  of  the 
British  Prime  Minister,  of  "  the  vindication 
of  public  right  in  Europe." 

When  this  book  was  written  Italy  had  not 
yet  entered  into  the  conflict,  but  her  claims 
will  be  found  fully  discussed  and  the  con- 
siderations put  forward  do  not  appear  to  call 
for  modification. 

C.  Ernest  Fayle. 

London, 
July  1915. 


AUTHOR'S    PREFACE 

The  object  of  this  book  is  to  set  forth  as 
briefly  and  as  clearly  as  possible  the  problems 
which  have  created  or  have  been  created  by 
the  present  war,  which  will  become  of  over- 
whelming importance  when  the  time  comes 
for  considering  terms  of  peace  and  which 
must  inevitably  form  the  chief  preoccupa- 
tion of  European  politics  for  the  next  two  or 
three  generations.  At  the  root  of  the  politi- 
cal and  racial  conflicts  in  which  these  problems 
have  become  embodied  there  will  be  found 
a  deeper  conflict  of  ideas,  a  more  subtle 
antagonism  between  two  opposed  concep- 
tions of  the  nature  of  States  and  the  elements 
of  national  greatness.  On  the  one  hand 
there  is  the  theory  of  a  natural  law  of  struggle 
between  States  and  of  military  power  as  not 
merely  a  necessity  of  existence  but  the 
ultimate  sanction  of  conduct  in  international 
affairs — a  theory  from  which  it  follows  that 
the  smaller  nations  can  hope  to  exist,  if  at 


AUTHOR  S   PREFACE 


all,  only  on  the  sufferance  of  the  stronger, 
and  that  the  greatness  of  a  nation  consists 
in  its  successful  exercise  of  military  power, 
without  regard  to  the  justice  or  morality  with 
which  that  power  is  used.  On  the  other 
hand,  there  is  the  conception  of  civilised 
nations  as  forming  a  community  founded 
upon  common  interests  and  upon  certain 
generally  accepted  ideas  of  international  law 
and  equity,  a  community  of  which  every 
member  has  the  right  to  develop  its  own 
culture  and  its  own  institutions  in  peace  and 
security  so  long  as  it  refrains  from  wanton 
interference  with  the  affairs  of  its  neighbours. 
With  this  conception  is  bound  up  the  prin- 
ciple of  nationality,  which  means  simply  the 
right  of  a  population  united  by  race  and 
language,  or  by  common  history  and  tradi- 
tions, to  live  under  the  government  of  its 
own  choice.  My  aim  has  been  to  trace  the 
working  of  these  opposed  conceptions  in  the 
conditions  and  events  which  led  up  to  the 
war ;  to  examine  their  bearing  upon  the 
questions  which  will  have  to  be  answered  at 
its  close ;  and  to  see  what  light  they  throw 
upon  the  possibility  of  safeguarding  Europe 
against  a  repetition  of  the  catastrophe. 
It  is  this  last  problem,  the  preservation  of 


AUTHOR  S   PREFACE  XI 

Europe  from  future  conflicts  on  this  scale, 
which  dwarfs  all  others  in  importance.  In 
dealing  with  each  question,  territorial,  racial, 
colonial,  economic  or  political,  I  have  en- 
deavoured to  bring  it  to  this  test — what 
solution  will  make  most  surely  for  the 
stability  and  security  of  the  European 
Society  ?  At  the  same  time,  I  have  kept  in 
mind  the  necessity  for  subordinating  theories 
to  facts  and  I  have  sought  to  deal  with  each 
problem  in  the  light  of  practical  politics, 
of  the  conditions  which  actually  exist,  even 
where  this  involved  the  rejection  of  schemes 
theoretically   preferable. 

It  is  perfectly  true  that  the  conditions 
which  will  obtain  at  the  close  of  the  war  are 
in  large  part  a  matter  of  conjecture.  This 
may  and  probably  does  render  it  useless  to 
discuss  any  detailed  programme  whether  for 
the  terms  of  peace  or  for  the  future  policy 
of  the  Powers,  but  our  knowledge  of  the 
present  situation  and  an  analysis  of  the 
causes  from  which  it  has  arisen  will  at  least 
throw  light  upon  the  general  principles  which 
make  for  liberty  and  security  on  the  one 
hand,  for  unrest  and  conflict  on  the  other.  It 
is  with  these  general  principles  that  I  have 
been  chiefly  concerned.     If  we  are  to  achieve 


xii  author's  preface 

a  settlement  which  shall  contain  the  elements 
of  permanence,  which  shall  pave  the  way 
for  the  creation,  in  whatever  form,  of  that 
recognised  European  Community  (forming 
the  subject  of  my  concluding  chapter) 
which  has  been  foreshadowed  by  more  than 
one  of  our  leading  statesmen,  it  will  be 
by  the  acceptance  of  a  few  outstanding 
principles — the  rights  of  nationalities,  the 
sanctity  of  international  law,  the  equal 
rights  of  small  States,  the  necessity  for  inter- 
national co-operation  in  preserving  order  and 
in  the  development  of  the  world's  resources. 
It  is  far  more  important  that  we  should 
realise  the  bearing  of  these  principles  upon 
the  problems  presented  to  us  than  that  we 
should  have  a  definite  and  detailed  programme 
for  the  settlement  of  each  individual  question. 
Many  of  these  questions  have  been  admir- 
ably treated  in  books  or  in  periodicals  since 
the  outbreak  of  the  war.  To  many  of  the 
Oxford  Pamphlets,  to  the  post-bellum  numbers 
of  the  Round  Table,  to  the  writings  of  Mr. 
Seton- Watson,  Mr.  G.  M.  Trevelyan,  and 
others  upon  the  questions  of  race  and 
nationality,  I  feel  myself  gratefully  indebted. 
There  have  appeared  also  many  pamphlets 
and  articles  dealing  with  the  general  issues 


AUTHOR  S   PREFACE  Xlll 

of  the  war  and  suggested  reconstructions 
of  European  society.  But  I  am  not  aware 
that  an  attempt  has  yet  been  made  to  present 
a  survey  of  the  problems  of  the  war  and  the 
settlement  as  a  whole  and  to  found  upon 
that  survey  an  inquiry  into  the  practical 
prospects  of  establishing  some  such  under- 
standing between  the  European  nations  as 
shall  preserve  us  from  a  repetition  of  the 
events  of  last  summer.  This  is  what  I  have 
tried  to  do,  and  as  I  have  endeavoured  through- 
out to  be  suggestive  rather  than  dogmatic, 
I  hope  that  the  book  may  serve  at  least  as  a 
starting-point  for  discussion. 

To  the  Garton  Foundation  for  encouraging 
the  Study  of  International  Polity  I  owe  the 
opportunity  of  writing  this  book  and  access 
to  most  of  the  material  on  which  it  is  based. 
I  have  to  express  my  gratitude  to  Lord 
Esher  and  Sir  Richard  Garton  for  their  active 
interest  and  encouragement,  without  which  it 
would  hardly  have  been  written. 

I  am  also  indebted  to  Lord  Parker  of 
Waddington  for  his  advice  and  suggestions 
on  the  general  treatment  of  the  subject ; 
to  Mr.  C.  Roden  Buxton  and  Mr.  J.  M.  Keynes 
for  their  criticisms  on  various  points  dealt 
with  in  the  fourth  and   sixth  chapters  re- 


XIV  AUTHOR  S   PREFACE 

spectively  ;  and  to  Mr.  John  Hilton  of  the 
Garton  Foundation  and  Mr.  Harold  Wright 
of  Cambridge  for  generous  assistance  in  the 
work  of  revision. 

C.  Ernest  Fayle. 

London, 
A-pril  1915. 


CONTENTS 
CHAPTER  I 

THE   NECESSITY   OF   A   SETTLEMENT 

National  unanimity  with  regard  to  the  war — Revolt  against 
the  Prussian  theory  of  aggression — The  determination  to 
achieve  future  security — Military  victory  essential  but  not 
sufficient — A  European  settlement  the  only  security  for 
peace — The  necessity  of  understanding  the  problems  of 
the  settlement — The  underlying  causes  of  wars — The 
doctrine  of  armed  rivalry  and  domination — The  doctrine 
of  agreement  and  co-operation — The  one  has  given  us  war 
— Will  the  other  give  us  peace  ?     .  .  .       pp.   1-16 

CHAPTER   II 

THE   ORIGINS   OF   THE   WAR 

The  real  issues  of  the  war  deeper  than  its  immediate  cause 
— The  significance  of  the  Austro-Serbian  quarrel — The 
Austro-Hungarian  Empire  and  the  principle  of  domination 
— Austrian  policy  in  the  Balkans  and  the  development  of 
Serbian  nationality — Why  war  became  inevitable — Russia's 
position  with  regard  to  the  Slav  States — The  struggle  for 
prestige  in  the  Balkans — The  collision  of  Austrian  and 
Russian  policies — Germany  as  the  ally  of  Austria — The 
unification  of  Germany  and  her  rise  as  a  Great  Power — 
The  price  of  Prussian  leadership — Moral  effects  of  the  war 
of  1870 — Alsace  and  Franco-German  relations — The  Dual 
Alliance — Anglo-German  relations — The  Entente — The  guar- 
antee of  Belgian  neutrality — The  grouping  of  the  Powers 
— The  outbreak  of  war — The  attitude  of  Italy  .  pp.  17-41 
xv 


XVI  CONTENTS 

CHAPTER   III 

THE   PRINCIPLES   OF   THE   SETTLEMENT 

The  "  crushing  "  of  Germany,  will  it  give  us  permanent  security  ? 
— A  warning  from  history — Treaties  of  Peace  and  the 
seeds  of  war — Wars  of  revenge — Wars  arising  from  division 
of  the  spoils — Conquered  provinces  as  sources  of  unrest — 
The  menace  of  artificial  arrangements  of  territory — The 
Congress  of  Vienna  and  its  attempt  at  a  settlement — The 
Holy  Alliance — The  idea  of  security  by  treaty — The  prin- 
ciple of  nationality — What  is  a  nation  ? — Nationality  and 
the  settlement — Independence  and  autonomy — The  value 
and  limitations  of  guarantees — The  changing  conceptions 
of  international  relations  and  their  bearing  upon  the 
settlement — The  objects  of  the  Allies — Justice  and  ex- 
pediency in  the  settlement — The  relation  of  strategical  to 
political  considerations — Shall  the  settlement  be  European  ? 
— The  position  of  the  neutrals — The  common  interests  of 
nations — The  place  of  Germany  in  the  European  system — 
The  possibility  of  a  European  entente — The  place  of  Utopia 
in  practical  politics     .....  pp.  42-80 


CHAPTER   IV 

THE    TERRITORIAL    PROBLEMS    OF    THE    SETTLEMENT 

The  principle  of  nationality  in  the  settlement — "  Re-drawing 
the  map  of  Europe  " — The  futility  of  dogmatising — The 
unknown  factors — Geographical  and  economic  factors  and 
their  bearing  upon  nationality — The  problems  of  Austria- 
Hungary — Disintegration  or  federation  ? — Is  federation 
possible  to-day  ? — The  fears  of  a  Slav  hegemony — The  Slav 
menace  and  Slav  grievances — The  German  Empire  and 
nationality — The  actual  problems — Poland — The  partitions 
— The  three  Polands — The  Russian  proclamation — The 
revival  of  Polish  nationality — Some  questions  of  frontiers — 
The  Ruthenes — Their  relations  with  Russia — The  future  of 
the  Ruthenian  districts — The  Czechs — Shall  the  Czech 
question  be  included  in  the  settlement? — Autonomy  or 
independence  ? — The  Germans  in  Bohemia — The  Slovaks 
— The   Southern   Slavs   and  Greater   Serbia — Serbs,  Croats, 


CONTENTS  XV11 

and  Slovenes — Do  they  desire  union  ? — The  capacity  of 
the  Southern  Slavs  for  self-government — Greater  Serbia — 
Italy  and  the  coast  provinces — Albania — Montenegro — A 
Southern  Slav  Confederation — The  Roumanians  in  Tran- 
sylvania— The  position  of  Roumania  in  Balkan  politics — 
The  demand  for  Roumanian  unity — Roumanian  inter- 
vention— Bessarabia — Bulgaria  and  a  Balkan  entente — 
The  Balkan  rapprochement — The  possibilities  of  an  enlarged 
Balkan  League — Constantinople — The  Trentino  and  Trieste 
— Italy  and  the  settlement — The  Trentino — Trieste — Alsace- 
Lorraine — Racial  character  and  history — The  French 
declaration — Some  suggestions  considered — Territorial  com- 
pensation to  Belgium — Would  it  appeal  to  the  Belgians  ? — 
Schleswig-Holstcin — The  plebiscite  of  the  northern  districts 
— Denmark  and  the  Kiel  Canal — The  position  of  Austria- 
Hungary  after  the  war — The  possible  union  of  Austria  with 
Germany — The  position  of  Hungary — A  summary  of  the 
principles  involved — The  practical  difficulties  of  the  ple- 
biscite— The  task  of  European  statesmanship,   pp.  81-163 


CHAPTER   V 

COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

Colonies  as  spoils  of  war — The  period  of  colonial  conquest — 
Failure  of  the  policy  of  exploitation — The  growth  of  the 
British  Empire — Beginnings  of  German  expansion — The 
scramble  for  Africa — Germany's  colonial  empire — Strate- 
gical reasons  for  capture  of  the  colonies — Their  value  as 
pledges — Interests  of  British  Overseas  Dominions — Togo- 
land — Kamerun — German  South-West  Africa  and  the  South 
African  Union — German  East  Africa  and  the  all-red  route 
— German  New  Guinea  and  the  Pacific  Islands — The  atti- 
tude of  Australia — Kiau-Chau — The  question  of  coaling 
stations — The  larger  problems  of  colonial  policy — Ger- 
many's "  place  in  the  sun  " — Concession-hunting  and  the 
mailed  fist — Commercial  penetration  and  political  influence 
— Common  interests  in  the  opening  up  of  undeveloped 
territory — The  necessity  of  co-operation — The  possible 
break-up  of  Asiatic  Turkey — A  possible  all-round  agree- 
ment .  .  .  .  .  .  -PP.  164-199 

2 


XV111  CONTENTS 

CHAPTER   VI 

THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

The  economics  of  conquest — Territorial  compensation — Colonies 
and  cash  value — Indemnities,  their  possibility  and  desira- 
bility— -Their  economic  effects — Their  political  effects — 
Compensation  to  Belgium — The  crushing  of  Germany  and 
British  commerce — Fiscal  arrangements  in  the  settlement 
— Counter-bounties — Free  Trade  areas — Roads  to  the 
sea  and  ports — Some  details  of  the  settlement — Allowances 
for  State-owned  property — Interned  ships — Confiscation  of 
sums  held  in  trust — Discrimination  against  German  bills — 
Patents — Economics  and  international  relations — The  inter- 
national partnership         ....         pp.  200-247 

CHAPTER  VII 

THE   EUROPE   OF   TO-MORROW 

Is  peace  in  itself  desirable  ? — Resistance  to  Prussian  arms  and 
the  victory  over  Prussian  ideals — The  burden  of  armaments 
and  its  real  significance — Why  attempts  at  limitation  have 
failed — The  Congress  of  Vienna  and  the  Holy  Alliance — 
The  situation  at  the  end  of  the  present  war — Fear  of 
aggression  and  its  influence  on  policy — The  law  of  struggle 
and  the  community  of  nations — The  Triple  Alliance  and 
the  Triple  Entente — An  alliance  of  all  the  Great  Powers — 
Mutual  guarantee  against  aggression — The  small  States 
and  the  alliance — Possible  grouping  in  confederations — The 
proposals  for  an  International  Court  and  Police  Force — 
The  practical  difficulties — The  dangers  of  prematurity — 
First  the  community,  then  the  law,  then  the  executive — ■ 
A  Consultative  Council  as  opposed  to  an  International 
Tribunal — Limitation  of  armaments  by  consent — The 
example  of  the  Canadian  frontier — The  position  of  America 
■ — Possible  non-military  sanctions — The  underlying  prin- 
ciple— The  Great  Settlement  ,  .  .         pp.  248-287 


CONTENTS 


XIX 


APPENDIX  A 

PAGE 

THE   RACE   QUESTION    IN   AUSTRIA-HUNGARY      .      289 

APPENDIX   B 

THE   FRANCO-GERMAN   WAR   INDEMNITY  .  .      2f)I 

INDEX  .......      301 


MAPS 


RACIAL   MAP   OF   CENTRAL   EUROPE 

THE   AUSTRO-HUNGARIAN    EMPIRE    . 

THE    PARTITIONS   OF   POLAND 

ALSACE-LORRAINE 

SCHLESWIG-HOLSTEIN     . 

THE   GERMAN    COLONIES   IN    AFRICA 

THE   GERMAN    COLONIES   IN    THE   PACIFIC 

TURKEY   IN   ASIA  . 


83 
89 

95 
151 
155 
1S1 
189 
197 


THE    GREAT    SETTLEMENT 

CHAPTER    I 

THE    NECESSITY   OF   A   SETTLEMENT 

The  present  war  is  distinguished  from  other 
conflicts  in  which  Great  Britain  has  been 
engaged  by  the  practical  unanimity  of  national 
feeling  with  regard  to  it.  Those  who  wel- 
comed the  outbreak  of  war  were  very  few  ; 
those  who  believe  that  it  could  have  been 
avoided  in  August  last,  still  fewer ;  those 
who  do  not  share  the  general  determination 
to  carry  it  through,  at  all  costs,  to  a  vic- 
torious issue,  so  few  as  to  be  practically 
negligible.  There  is  to-day  neither  a  war 
party  nor  a  peace-at-any-price  party.  The 
almost  universal  sentiment  is  one  of  sober 
resolve  to  perform,  quietly  and  thoroughly, 
an  unsought  and  unwelcome  task  which  we 
could  not  in  honour  or  with  safety  refuse. 
At  the  back  of  this  determination  there  is 


2  THE   NECESSITY   OF   A   SETTLEMENT 

an  instinctive  revolt  against  the  whole  Prus- 
sian theory  of  aggressive  war  as  a  legitimate 
expression  of  national  policy.     We  have  often 
been  told  that  international  law  has  no  real 
existence  ;  that  treaties  will  be  observed  only 
so  long  as  it  suits  the  convenience  of  the 
parties  ;    that  the  nations  are  subject  to  a 
law  of  struggle  in  which  the  weakest  must 
go  to  the  wall.     Yet  the  violation  of  Belgian 
neutrality,  under  the  plea  of  military  neces- 
sity,   has   undoubtedly   shocked   the   public 
conscience.     Seen    in    action,    the    Prussian 
theory  is  felt  by  the  whole  British  people  to 
be  destructive  of  those  conceptions  of  order 
and  public  right  upon  which  the  development 
of  modern  civilisation  rests.     There  is  a  deep 
and  fierce  resentment  against  the  interruption 
of  the  life  of  the  world  by  the  activities  of  a 
militarist  system  which  has  become  an  ana- 
chronism.    It  is  as  if  a  merchant  with  whom 
we  had  business  relations  had  suddenly  failed 
to    honour    his    bills.     The    foundations    of 
public  faith  have  been  shaken  and  we  find 
ourselves  suddenly  thrown  back  upon  out- 
worn conditions,   conditions  in  which  sheer 
military  strength  becomes  the  only  security 
against  outrage. 

Hence,   the  resolution  to   win  is  coupled 


THE   NATIONAL   DETERMINATION  3 

with  a  steady  determination  that  Europe 
shall  not  again  be  plunged  into  chaos.  In 
every  utterance  of  our  public  men  or  our 
Press  there  occurs  in  some  form  or  other  the 
determination  to  make  an  end  of  this  mili- 
tarist menace,  to  secure  ourselves  against 
any  future  outbreak  of  this  policy  of  the 
jungle.  The  very  vastness  of  the  conflict 
reinforces  this  determination.  The  enormous 
numbers  engaged,  the  terrible  proportions  of 
the  casualty  lists,  the  greatness  of  the  sacri- 
fices which  we  have  made  and  are  prepared 
to  make,  demand  an  adequate  recompense. 
If  we  make  some  effort  to  realise  the  long 
agony  of  Belgium,  the  terror  and  anguish  and 
desolation  of  the  peaceful  population  in 
Flanders  and  Northern  France,  the  heroism 
and  the  sufferings  of  our  troops  in  the 
trenches,  we  feel  that  it  would  be  intolerable 
that  these  sacrifices  should  have  been  made 
in  vain.  It  is  unthinkable  that  they  should 
result  in  some  patched-up  truce,  in  a  victory, 
however  glorious,  which  would  expose  us  in 
twenty  years'  time  to  the  risk  of  another 
Louvain,  the  prospect  of  starvation  for 
millions,  another  year  of  carnage  and  horror. 
It  is  for  this  reason  that  so  many  minds 
are  at  work  upon  the  problem  of  what  shall 


4  THE   NECESSITY  OF  A  SETTLEMENT 

follow  the  war.  It  is  evident  that  mere 
military  victory  will  not  give  us  the  security 
which  we  desire.  Military  victory  is  indeed 
the  first  essential  of  security.  But  military 
victory  alone  cannot,  of  its  very  nature,  make 
that  security  permanent.  When  Louis  XIV 
and  Napoleon  menaced  the  liberties  of 
Europe,  they  were  beaten  down  by  the  only 
means  available,  by  the  armed  force  of 
Europe,  but  France,  happily,  was  not  per- 
manently crushed.  Germany,  after  Jena, 
was  broken,  humbled,  divided,  Prussia  her- 
self was  stripped  of  half  her  territory,  bur- 
dened with  indemnities,  subjected  to  enforced 
limitations  of  armaments.  Yet  precisely 
from  that  period  dates  the  impulse  to  Ger- 
man unity  under  Prussian  leadership,  result- 
ing in  the  rise  of  another  great  Power  in 
Europe. 

Even  if  we  assume,  therefore,  that  from 
Germany  alone  can  any  future  menace  to  the 
peace  of  Europe  come,  there  will  remain  a 
task  for  the  statesmen  after  the  soldiers  have 
done  their  work.  And  it  would  be  too  much 
to  assume  that  no  other  Power  will  ever  be 
bitten  by  the  madness  of  aggression.  His- 
tory shows  us  one  Power  after  another  as  the 
disturber  of  European  peace.     The  policy  of 


THE   NEED   FOR   SAFEGUARDS  5 

nations  varies  with  the  development  of  their 
thought  and  spirit,  a  development  which  is 
marked  by  periods  of  reaction  as  well  as  of 
progress.  It  may,  at  any  time,  be  diverted 
by  the  influence  of  a  few  outstanding  person- 
alities ;  it  is  constantly  moulded  by  changing 
circumstances.  The  most  pacific  people  may 
be  deluded  by  false  doctrines  or  misguided 
by  unscrupulous  politicians.  The  most 
pacific  government  may  be  swept  off  its  feet 
by  a  sudden  explosion  of  popular  anger.  If, 
therefore,  we  are  to  achieve  any  security 
commensurate  with  the  greatness  of  the 
present  struggle,  our  policy  at  the  close  of 
the  war  must  be  directed  towards  the  pro- 
vision of  safeguards  which  shall  be  of  uni- 
versal application.  The  problem  before  us  is 
not  merely  to  secure  ourselves  against  re- 
newed aggression  on  the  part  of  Germany, 
but  to  get  rid,  as  far  as  possible,  of  that  con- 
stant friction — open  or  latent — which  has 
converted  the  history  of  Europe  into  an 
armed  truce  punctuated  with  disastrous  wars. 
There  is  one  thing  and  one  thing  only 
which  can  remove,  even  partially,  this  in- 
tolerable menace  :  and  that  is  a  settlement 
which  shall  put  an  end  to  the  outstanding 
causes  of  European  unrest.     It  is  not  to  be 


6  THE   NECESSITY   OF  A  SETTLEMENT 

supposed  that  the  war  will  have  worked  any 
sudden  change  in  human  nature.  Men  will 
still  fight  if  they  believe  that  their  honour 
or  interests  demand  it.  The  only  chance  of 
permanent  peace  is  the  removal  of  the  causes 
of  war. 

The  factors  which  produce  war  are  quite 
capable  of  general  classification,  and  it  is 
worth  while  at  least  to  examine  them  and 
see  how  far  they  are  removable.  It  is  worth 
while,  also,  to  inquire  whether  it  is,  or  is  not, 
possible  to  take  some  more  definite  step 
than  has  hitherto  been  attempted  towards 
organising  the  world  for  peace.  We  are  told, 
indeed,  that  "  adequate  military  preparation 
is  the  only  means  yet  devised  by  man  to 
avoid  the  horrors  of  war."  '  We  can  only 
say  that  it  has  signally  failed  to  achieve  this 
purpose.  Superior  military  preparation  may 
indeed  secure  victory  in  war,  and  so  minimise 
its  horrors  and  losses  in  the  case  of  the  suc- 
cessful combatant.  There  is  ample  evidence 
that  it  is  not  sufficient  to  avert  war.  The 
moral  may  be  that  wars  are  inevitable,  that 
in  this  one  respect  mankind  is  incapable  of 
progress,  and  that  though  we  have  ceased 
to   kill   each   other   singly   with   rapiers   we 

1  Morning  Post,  December  16,  1914. 


BRITAIN'S   OPPORTUNITY  7 

must  continue  to  do  so  in  millions  with 
magazine  rifles.  But  before  accepting  this 
conclusion  it  is  at  least  worth  while  to  ask 
whether  any  alternative  policy  has  ever  been 
seriously  tried,  and  if  not,  whether  it  might 
not  be  worth  trying. 

It  is  for  this  reason  that  it  becomes  im- 
portant for  us  in  Great  Britain  to  acquaint 
ourselves  in  some  measure  with  the  problems 
which  will  have  to  be  faced  when  the  terms 
of  peace  come  to  be  discussed.  It  is  impos- 
sible to  overestimate  the  importance  of  the 
issues  ;  and  if  Great  Britain  is  to  play  that 
part  in  determining  them  to  which  her  power 
and  traditions  entitle  her,  it  will  be  neces- 
sary for  the  British  public  to  have  these 
issues  clearly  before  them.  They  are  behind 
the  Government  as  one  man  in  carrying  on 
the  war,  because  they  feel  instinctively  that 
it  is  being  waged  for  the  preservation  of  those 
institutions  which  they  value  most  highly. 
It  is  an  essential  factor  of  our  strength  that 
they  realise  the  gravity  of  the  crisis.  It  will 
be  an  essential  factor  in  our  influence  on  the 
framing  of  the  settlement  that  they  shall 
realise  how  far-reaching  may  be  its  effects, 
and  shall  understand  the  main  facts  of  the 
problems  involved. 


8  THE   NECESSITY   OF   A   SETTLEMENT 

It  may  be  said  in  general  that  all  wars  are 
caused  either  by  a  supposed  opportunity  for 
material    gain    or    by    the    desire    to    assert 
national   superiority.     The   desire   for   pres- 
tige, for  political  and  military  power,  is  based 
chiefly  on  a  belief  in  its  capacity  to  secure 
these  ends.     Nations  desire  to  annex  terri- 
tory either  because  they  expect  to  add  to 
their  national  wealth  and  prosperity  by  so 
doing,  or  because  they  wish  to  increase  their 
power   as   against   that   of  some   hereditary 
rival.     And    these    hereditary    rivalries    are 
generally  the  result   of  previous  conquests. 
The    so-called    "  conflicts    of    culture "    are 
probably    based   less   on   the   crusading   en- 
thusiasm of  a  nation  for  the  spread  of  its 
own  institutions,  than  on  fear  of  domination 
by  a  less  highly  civilised  people,  or  on  resent- 
ment at  the  domination  by  such  people  of 
racially    allied    populations.     In    part,    also, 
they  are  caused  by  the  belief  that  military 
victory   and  the   ability   to   subjugate   alien 
populations    is    a    legitimate    assertion    of 
national  superiority  and  the  highest  expres- 
sion of  national  consciousness.     In  the  minds 
of  a  people  firmly  convinced  of  the  advan- 
tages   to    be    derived    from    the    aggressive 
exercise   of   military   power   and   dominated 


THE   THEORY   OF   DOMINATION  9 

by  the  traditions  of  a  military  caste,  pride 
in  national  achievement  easily  becomes  re- 
stricted to  this  one  field.  National  emula- 
tion, the  desire  to  excel  other  nations  in 
vigour  and  ability,  in  the  capacity  for  self- 
sacrifice,  and  in  strength  of  character  becomes 
identified  with  the  desire  to  be  "  top  dog," 
to  dominate  the  world  in  the  military  sense. 
By  a  curious,  but,  in  the  circumstances,  a  not 
unnatural  confusion  of  thought,  it  is  believed 
that  the  excellence  of  a  nation's  culture,  its 
standing  in  the  realms  of  art  and  thought, 
its  commercial  prosperity,  stand  or  fall  by  its 
capacity  to  exercise  military  power  rather 
than  by  the  freedom  of  its  institutions,  the 
contributions  of  its  thinkers  and  writers  and 
artists  to  the  intellectual  life  of  the  world, 
or  the  honesty  and  energy  of  its  artisans  and 
traders. 

The  acceptance  of  this  point  of  view  neces- 
sarily involves  the  conception  of  nations  as 
natural  rivals  and  of  world-history  as  an 
incessant  struggle  between  the  nations  for 
military  domination.  Three  or  four  States 
having  similar  interests  may  enter  into  a 
temporary  alliance  for  the  purpose  of  over- 
powering another  group,  or  of  balancing  its 
power  ;  but  anything  like  a  general  organisa- 


10  THE   NECESSITY   OF   A   SETTLEMENT 

tion  of  the  civilised  world,  an  alliance  of  all 
civilised  nations,  is  looked  upon  as  impos- 
sible, because  the  motives  tending  towards 
conflict  are  presumed  to  be  stronger  than  any 
community  of  interests.  Thus  we  get  the 
curious  position  that,  while  every  nation 
carrying  on  a  vigorous  intellectual  and  com- 
mercial life  is  largely  and  increasingly  de- 
pendent upon  the  activities  of  other  nations, 
the  States  by  which  these  nations  are  repre- 
sented are  supposed  to  be  in  perpetual  rivalry 
on  conflict.  In  art,  in  literature,  in  science, 
in  philosophy,  the  most  vigorous  and  charac- 
teristic national  products  are  precisely  those 
which  profit  most  largely  from  a  free  ex- 
change of  ideas,  from  uninterrupted  contact 
with  the  life  and  thought  of  neighbouring 
peoples.  In  finance  and  commerce  a  nation 
which  attempted  to  isolate  itself  from  the 
general  life  of  the  world  would  commit 
economic  suicide.  Yet  we  find  people  imag- 
ining that  a  State  can  gain  respect  for  its 
culture  by  attempting  to  destroy  that  of  a 
highly  developed  but  smaller  neighbour  ; 
that  it  is  its  duty  to  suppress  the  language 
and  traditions  of  a  small  people  living  within 
its  borders ;  or  that  a  great  commercial 
people  can   promote   its  prosperity  by  des- 


THE   LAW   OF   STRUGGLE  II 

troying    the    purchasing    power   of    its  best 
customer. 

This  theory  of  a  "  natural  law  of  struggle  " 
between  nations  leads  logically  to  the  con- 
clusion that  national  rivalries  are  outside 
the  scope  of  the  moral  law.  It  is  constantly 
assumed  in  the  discussion  of  international 
politics  that  neither  the  precepts  of  Chris- 
tianity nor  the  ordinary  ethical  code  by 
which  the  conduct  of  civilised  men  towards 
each  other  is  regulated  apply  to  the  relations 
between  States.  If  we  grant  the  supposition 
that  the  vital  interests  of  nations  necessarily 
conflict,  it  is  easy  to  show  that  governments, 
which  are  the  trustees  of  those  interests, 
may  put  forward  a  very  powerful  plea  of 
necessity  to  justify  any  actions  which  are 
presumed  to  promote  them,  whatever  injustice 
and  suffering  may  be  inflicted  thereby  upon 
the  peoples  of  other  States.  On  the  hypo- 
thesis that  the  relations  of  States  are  those 
of  a  struggle  to  survive,  resulting  in  the 
predominance  of  the  fittest,  might  becomes 
not  merely  the  protection  but  the  essence  of 
right,  and  the  smaller  nations,  whose  numeri- 
cal inferiority  restricts  their  capacity  for  the 
exercise  of  military  force,  exist,  if  at  all, 
merely  on  the  sufferance  of  the  greater.      A 


12  THE   NECESSITY   OF   A   SETTLEMENT 

State  which  is  capable  of  conquering  proves 
thereby  its  "  fitness  "  to  dominate  others,  and 
the  vanquished  can  appeal  to  no  law  higher 
than  that  of  force. 

These  doctrines,  while  not  unknown  in  any 
country,  are  held  most  firmly  by  the  mili- 
tarist Empires  of  Central  Europe.  If  we 
have  been  revolted  by  the  conduct  of  Ger- 
many, it  is  because  a  certain  school  of  her 
writers  and  politicians  have  worked  them  out 
with  a  pitiless  and  consistent  logic  which  for- 
bids the  acceptance  of  those  "  artificial " 
laws  of  fair  play  and  international  morality 
by  which  men  in  general,  even  when  they 
accept  the  theory  of  the  law  of  struggle,  miti- 
gate— happily,  if  inconsistently — its  crude 
brutality.  If  Germany  and  Austria  are 
mainly  responsible  for  the  outbreak  of  the 
present  war,  it  is  because  they,  more  than  any 
other  European  States,  base  their  conception 
of  national  prosperity  and  national  honour 
upon  the  use  or  threat  of  military  force  and 
upon  their  ability  to  keep  in  subjection  the 
populations  of  conquered  territories.  We 
shall  see  how  closely  these  beliefs  are  con- 
nected with  the  definite  questions  which  gave 
rise  to  the  present  war  and  with  those  which 
will  call  for  solution  when  it  is  over. 


THE   DOCTRINE   OF   CO-OPERATION  13 

In  opposition  to  this  theory  of  national 
greatness  there  has  come  into  existence  an- 
other, the  principle  of  which  may  be  briefly 
stated  in  two  general  propositions.  First, 
that  a  system  of  government  or  a  national 
policy  based  on  force  and  not  on  agreement 
is  necessarily  futile  and  harmful.  Secondly, 
that  the  nations  of  the  civilised  world  are  not 
rival  units,  but  members  of  a  community 
morally,  intellectually,  and  economically  in- 
terdependent, having  common  interests  only 
to  be  secured  by  co-operation. 

This  conception  of  co-operation  between 
nations  is  based  largely  upon  respect  for 
nationality.  If  civilised  life  is  not  to  be  re- 
duced to  a  dull  level  of  uniformity,  it  is  essen- 
tial that  every  nation  should  be  able  to 
contribute  to  the  common  stock  of  civilisa- 
tion that  which  is  characteristic  and  peculiar 
in  its  institutions  and  outlook,  that  which 
it  has  derived  from  its  own  special  oppor- 
tunities and  traditions.  But  if  this  is  to  be 
the  case,  it  is  important  that  the  energies  of 
all  shall  not  be  perpetually  diverted  into  the 
one  channel  of  preparation  for  self  -defence ; 
and,  above  all,  that  the  smaller  nations,  rich 
in  genius  and  industry,  but  of  little  military 
power,  shall  be  protected  against  the  fear  of 

3 


t4  the  necessity  of  a  settlement 

conquest  and  subjugation  by  a  larger  but 
not  necessarily  more  highly  civilised  neigh- 
bour. Where  different  nationalities  live  side 
by  side  under  the  administration  of  a  single 
government,  these  considerations  suggest  that 
each  should  be  free  to  cultivate  its  own  lan- 
guage, traditions,  and  institutions,  and  to 
contribute  its  own  share  to  the  life  of  the 
State  and  of  the  world,  as  is  the  case  to-day 
with  the  Flemings  and  Walloons  in  Belgium, 
or  the  nations  of  the  British  Dominions — the 
French  and  British  in  Canada,  the  Dutch  and 
British  in  South  Africa. 

This  conception  of  international  relations 
involves  both  a  test  of  greatness  and  an  ideal 
of  conduct  radically  opposed  to  that  of  the 
law  of  struggle.  It  implies  that,  far  from 
might  constituting  right,  the  exercise  of 
power  to  override  considerations  of  justice 
and  morality  is  the  prime  offence  against  the 
very  constitution  of  civilised  society  amongst 
nations  as  amongst  individuals.  It  sanctions 
and  glorifies  the  exercise  of  military  force 
only  so  far  as  it  is  called  in  to  prevent  the 
overruling  of  public  right  by  a  powerful  ag- 
gressor. It  denies  absolutely  the  right  of  a 
stronger  people  to  impose  upon  a  weaker  its 
own  institutions  or  culture.     It  does  more  : 


THE    EMERGENCE   OF   ORDER  15 

it  implies  that  conquest  and  subjugation, 
since  they  run  counter  to  the  fundamental 
laws  of  natural  development,  are  in  the  long 
run  harmful  not  merely  to  the  conquered  but 
to  the  interests  as  well  as  to  the  character 
of  the  conqueror. 

It  would  probably  be  untrue  to  say  that 
the  actions  of  any  civilised  State  in  modern 
times  have  ever  been  consciously  guided  by 
an  intellectual  acceptance  of  either  of  these 
conceptions  in  its  entirety  ;  yet  the  history 
of  international  relations  is,  on  the  whole, 
the  history  of  the  gradual  emergence  and 
development  of  this  idea  of  public  morality 
and  international  order.  It  would  be  folly 
to  pretend  that  the  older  conception  has 
never  governed  the  policy  of  ourselves  or 
of  our  Allies  even  in  recent  years,  or  that 
it  does  not  colour  in  some  degree  our  outlook 
to-day.  But  in  the  main  we  may  say  that 
we  do  stand  in  the  present  war  for  the  force 
of  right  as  against  the  right  of  force,  for  the 
idea  of  a  human  society  based  on  co-opera- 
tion and  consent  as  against  the  idea  of  a 
society  based  on  struggle  and  domination. 

In  analysing  the  causes  which  have  brought 
about  the  war,  and  the  problems  which  will 
have  to  be  solved  if  we  are  to  secure  our- 


1 6  THE   NECESSITY   OF   A   SETTLEMENT 

selves  against  a  recurrence  of  this  universal 
catastrophe,  we  shall  be  compelled  to  trace 
the  working  of  the  ideas  by  which  European 
politics  have  been  guided  in  the  past,  and 
we  shall  see  how  largely  they  have  been 
coloured  by  the  theory  of  the  law  of  struggle 
between  nations  and  the  advantages  of 
domination.  For  the  moment  it  may  be 
wise  to  consider  the  newer  conception  as  a 
working  hypothesis,  and  see  what  light  it 
throws  upon  the  questions  raised,  and  whether 
these  questions  are  capable  of  a  solution 
which  would  pave  the  way  to  that  alliance 
or  entente  of  all  civilised  Powers  for  the  pro- 
tection of  their  common  interests  which 
would  naturally  be  its  ultimate  expression. 


CHAPTER   II 

THE   ORIGINS   OF  THE   WAR 

It  is  generally  recognised  that  the  real 
causes  of  the  present  war  lie  much  deeper 
than  the  immediate  incidents  of  the  Austro- 
Serbian  quarrel.  The  Serajevo  murder  and 
the  Austrian  ultimatum  were  but  the  igniting 
spark  to  that  Teuto-Slav  quarrel  which  has 
so  long  menaced  the  peace  of  Europe.  And 
this  quarrel  itself  was  but  one  phase  of  the 
armed  truce  which  had  thinly  cloaked  the 
latent  rivalries  and  ambitions  of  the  Powers. 
It  is  not  necessary  or  desirable  in  this 
place  to  enter  upon  a  detailed  discussion  of 
the  immediate  causes  of  the  war.  All  the 
nations  engaged  have  issued  in  some  form 
or  another  a  statement  of  their  case,  and 
the  public  are  familiar  with  their  contentions. 
Nor  is  it  necessary  to  trace  back  at  any 
length  the  development  of  the  political 
groupings  and  rivalries  which  resulted  in 
August    1 91 4  in  the  emergence  of    the  two 

17 


l8  THE   ORIGINS   OF  THE   WAR 

groups  which  confront  each  other  to-day. 
To  do  so  would  be  to  write  the  political  and 
diplomatic  history  of  Europe  for  the  last 
hundred  years.  The  very  extent  of  these 
ramifications  and  the  amount  that  has  been 
written  about  them  tend,  at  times,  to  obscure 
the  main  issues.  These  main  issues  it  is 
necessary  to  keep  clearly  in  mind  when  we 
approach  the  problems  of  the  settlement. 
For  it  is  only  by  understanding  the  under- 
lying causes  of  the  war  that  we  can  under- 
stand the  essentials  of  peace. 

Whatever  view  we  take  as  to  the  extent 
to  which  the  German  military  caste  desired 
war  for  its  own  sake,  it  was  in  their  alliance 
with  Austria  and  the  outbreak  of  the  Austro- 
Serbian  conflict  that  they  found  their  oppor- 
tunity and  excuse.  It  will  be  well,  therefore, 
to  begin  by  an  attempt  to  appreciate  the 
underlying  significance  of  that  conflict. 

It  is  the  more  important  to  seek  for  such 
underlying  significance  because  the  actual 
incidents  which  led  to  the  outbreak  of  war 
were  so  ridiculously  disproportionate  to  the 
extent  of  the  conflagration  which  they  have 
caused.  It  is  obvious  on  the  face  of  it  that 
the  discrepancies  between  the  demands  con- 
tained in  the  Austrian  note  and  the  terms 


THE   AUSTRO-SERBTAN   CONFLICT  19 

of  the  Serbian  reply  were  not  in  themselves 
a  cause  of  war.  There  lay  beneath  the 
surface  some  deeper  quarrel ;  and  the  signi- 
ficance of  that  quarrel  lies  in  the  light 
thrown  by  it  upon  the  position  of  the 
Austro-Hungarian  Empire  in  the  European 
system. 

The  conflict  between  Austria  and  Serbia 
reveals  that  tragic  futility — a  "  conflict  of 
two  rights."  It  is  impossible  not  to  sym- 
pathise with  the  desire  of  the  Serbs  in  Austria- 
Hungary  for  union  with  their  brethren  in 
independent  Serbia.  It  was  impossible  that 
the  Serbians  should  not  sympathise  with 
that  desire.  It  was  at  least  natural  that  a 
pan-Serbian  agitation  should  spring  up  on 
both  sides  of  the  border.  Yet  it  is  perfectly 
true  that  this  agitation  threatened  the  very 
existence  of  the  Austro-Hungarian  Empire. 
It  is  perfectly  true  that  the  Austrian  Govern- 
ment was  committed  to  the  repression  of 
this  agitation  by  the  principle  of  its  own 
being. 

It  is  a  commonplace  of  publicists  that  a 
"conflict  of  two  rights"  can  be  decided 
only  by  the  sword,  since  neither  party 
to  such  a  conflict  can  in  honour,  or  with 
regard  to  its  own  preservation,  compromise 


20  THE   ORIGINS   OF   THE   WAR 

the  dispute.  It  is,  in  fact,  on  this  theory 
that  the  doctrine  of  the  inevitability  of 
war  is  based.  If  room  is  left  for  such  con- 
flicts in  the  settlement  after  the  war,  there 
is  little  hope  that  much  can  be  done  to 
secure  the  peace  of  the  world.  This  being 
so,  it  is  worth  while  to  look  for  a  moment 
at  the  basis  of  the  "  rights  "  in  question. 

The  right  on  the  side  of  Serbia  was  that 
of  a  population  having  race,  language,  and 
traditions  in  common,  united  at  one  period 
of  history  under  a  single  government,  but  at 
present  divided,  to  work  together  for  union 
under  the  government  of  their  own  choice. 
It  is  a  right  recognised  by  the  principle  for 
which  we  and  our  Allies  are  fighting.  It  is 
based  on  the  principles  of  government  by 
consent  and  the  free  and  natural  development 
of  nationality. 

The  right  on  the  side  of  Austria  was  the 
right  of  a  Government  to  maintain  the 
integrity  of  its  frontiers  and  its  authority 
over  the  peoples,  of  whatever  race,  at  present 
subject  to  it,  irrespective  of  the  desires  of 
the  governed.  In  considering  the  justice  of 
this  demand,  it  must  be  remembered  that  the 
Austro-Hungarian  Empire  is  not  a  national 
organism  but  an  artificial  structure,  embracing 


THE  PROBLEM  OF  AUSTRIA  21 

numerous  and  frequently  hostile  races.  Its 
populations  have  not  been  fused  into  a 
single  nationality  by  intermarriage  and  the 
growth  of  a  common  tongue  as  Celt,  Saxon, 
Dane,  and  Norman  have  been  fused  in  Britain. 
They  have  not  been  united  as  Flemings  and 
Walloons  have  been  united  in  Belgium,  or 
French,  Germans,  and  Italians  in  Switzerland, 
by  common  consent  and  common  institu- 
tions. The  Empire  consists  of  two  sovereign 
States,  bound  together  merely  by  the  fact 
that  the  hereditary  Emperor  of  Austria  is 
also  hereditary  King  of  Hungary.  The  only 
affairs  permanently  under  common  adminis- 
tration are  foreign  affairs  and  defence.  An 
existing  commercial  union  is  renewable  every 
ten  years. 

The  position  is  complicated  by  the  fact 
that  both  the  Austrian  and  the  Hungarian 
governments  represent  the  rule  of  a  dominant 
race  over  subject  peoples.  In  neither  case 
does  the  dominant  race  form  a  majority  of 
the  population.  The  census  of  1910  showed 
that  the  Germans  in  Austria  numbered 
9,950,266/  out  of  a  population  of  28,571,934. 
In  Hungary  the  Magyars  were  10,050,575/ 
out  of  a  total  of  20,886,487.     These  ruling 

1  On  the  basis  of  language. 


22  THE   ORIGINS   OF  THE   WAR 

races  are  absolutely  distinct  in  type  and 
language  from  the  peoples  whom  they  control 
and  from  each  other.  The  Germans  of 
Austria  are  closely  akin  to  the  South  Ger- 
mans of  Bavaria.  Austria  was,  until  1866, 
politically  connected  with  the  other  German 
States;  her  literature  and  traditions  are 
German.  The  Magyars  are  a  proud  and 
spirited  race  of  Ural-Altaic  stock  with  a  fine 
literature  and  a  stirring  history.  The  Union 
of  the  Crowns  has  not  prevented  continual 
friction  between  the  two  races,  breaking  out 
at  times  (so  recently  as  1848)  into  armed 
conflict.  Neither  in  political  ideas  nor  in 
matters  of  finance  and  economics  is  there 
any  strong  sympathy  between  them,  and 
they  have  been  held  together  simply  by 
dynastic  allegiance  and  by  mutual  support 
in  domination  over  the  Slav  and  Latin 
populations  of  their  subject  provinces.  Into 
the  question  of  these  provinces,  acquired  at 
various  times  as  the  result  of  conquest  or 
marriage,  it  will  be  more  convenient  to  go 
when  we  come  to  consider  in  detail  the 
problems  of  the  settlement.  Meantime  it  is 
pertinent  to  observe  that  while  the  Austrian 
Government  has  in  recent  years  made  con- 
siderable   efforts    to    conciliate    its    subject 


THE    MAGYAR   TYRANNY  23 

peoples  and  to  create  a  genuine  national 
consciousness,  by  the  grant  of  self-govern- 
ment in  local  affairs  and  representation  on  the 
councils  of  the  Empire,  the  tendencies  of  the 
Hungarian  Government  have  been  purely 
reactionary.  Even  Kossuth,  the  champion 
of  Magyar  nationalism  as  against  Austria, 
firmly  upheld  the  repression  of  Slav  speech 
and  of  Slav  sentiment.  The  efforts  of 
the  Government  of  Vienna  to  create  a 
national  sentiment  in  the  Empire  have  been 
frustrated  again  and  again  by  the  Magyar 
oligarchy.  The  forms  of  constitutional  go- 
vernment may  have  been  granted,  but  no 
means — the  manipulation  of  the  franchise,  the 
grossest  intimidation  at  elections,  restrictions 
on  the  freedom  of  the  press  and  on  educa- 
tion— have  been  too  unscrupulous  to  be  used 
for  the  maintenance  of  Magyar  ascendancy. 

We  see,  therefore,  a  State  comprising  the 
wreckage  of  a  dozen  kingdoms  and  princi- 
palities, inhabited  by  men  of  a  dozen  different 
nationalities — diverse  in  speech  and  culture 
and  many  of  them  bitterly  hostile  to  one 
another — held  together  simply  by  the  concen- 
tration of  political  and  military  power  in  the 
hands  of  two  dominant  races  who  have  been 
content  in  the  main  to  sink  their  own  differ- 


24  THE   ORIGINS   OF   THE   WAR 

ences  for  the  sake  of  mutual  support  in  this 
artificial  ascendancy.  Such  a  State  must 
necessarily  be  militarist  and  autocratic.  A 
government  which  is  based  upon  force  pure 
and  simple  and  not  on  the  consent  of  the 
governed  must  rely  for  its  very  existence  on 
military  power. 

When  such  a  State  sees  across  the  border 
the  rise  of  an  independent  nation,  akin  to  its 
own  subject  races,  it  necessarily  feels  its 
territorial  integrity  threatened.  It  is  bound 
to  recognise  the  possibility  that  subjects  whom 
it  has  not  assimilated  but  has  merely  held 
in  subjugation  will  desire  union  with  their 
independent  brethren.  It  is  bound  to  recog- 
nise the  probability  that  this  desire  will  be 
reciprocated  across  the  frontiers.  Hence  the 
jealousy  with  which  Austria-Hungary  has 
watched  the  rise  of  the  Slav  nations  in  the 
Balkans,  and  especially  of  Serbia.  The  policy 
adopted  by  Austria  towards  this  little  Slav 
State  presents  one  of  the  most  repulsive 
studies  in  modern  diplomacy.  It  has  been 
directed  first  to  acquiring  a  controlling  in- 
fluence in  the  Serbian  Government  by  every 
kind  of  diplomatic  intrigue ;  secondly,  to 
reducing  Serbia  to  economic  dependence  upon 
Austria  by  shutting  her   out  from  the   sea 


SERBIA    AND   AUSTRIAN    POLICY  2$ 

and  so  compelling  her  to  find  an  outlet 
for  her  produce  solely  through  Austria- 
Hungary  ;  thirdly,  to  isolating  and  weakening 
her  by  sowing  dissensions  between  Serbia 
and  the  other  Balkan  Powers.  The  palmy 
days  of  Austrian  influence  were  during  the 
reign  of  King  Milan — under  whom  Serbian 
policy  was  practically  dictated  by  the  Austrian 
Foreign  Office.  Popular  resentment  against 
his  subservience  culminated  in  the  abdica- 
tion of  Milan.  By  identifying  the  Austrian 
Government  with  his  personal  unpopularity 
the  history  of  his  reign  contributed  largely 
to  Serbian  distrust  of  Austria.  The  policy 
of  economic  pressure  led  in  1905  to  a  tariff 
war  by  which,  though  it  was  ultimately 
unsuccessful,  Austria  succeeded  in  causing 
much  suffering  to  the  Serbian  peasants.  The 
friction  caused  by  this  episode  gravely  strained 
the  relations  between  the  two  States.  The 
policy  of  isolation  was  manifested  in  1885 
when  the  Austrian  Government  encouraged 
that  of  King  Milan  in  the  unwarrantable  and 
ill-judged  attack  upon  Bulgaria  which  was 
so  signally  defeated  at  Slivnitza.  It  reap- 
peared at  the  end  of  the  first  Balkan  War 
when  Austria  interfered  to  prevent  the 
acquisition  of  ports  or  coastal  territory  by 


26  THE   ORIGINS   OF   THE   WAR 

Serbia  or  Montenegro,  driving  Serbia  to 
seek  compensation  to  the  eastward,  with 
the  result  of  embroiling  her  with  Bulgaria 
and  bringing  about  the  second  Balkan  War. 
When  the  effect  of  this  purely  selfish  and 
bitterly  hostile  policy  is  added  to  the  friction 
naturally  arising  from  the  discontent  among 
the  Slavs  of  Austria-Hungary  and  the  exist- 
ence of  pan-Serbian  agitation  on  both  sides 
of  the  border,  intensified  by  the  annexation 
of  Bosnia-Herzegovina,  it  is  obvious  that 
only  a  profound  modification  in  both  the 
internal  and  external  policy  of  the  Empire 
could  render  the  outbreak  of  actual  conflict 
anything  but  a  question  of  time. 

Hitherto  the  continued  integrity  of  the 
Empire  has  been  regarded  as  necessary  by 
the  statesmen  of  Europe,  because  of  their 
dread  of  the  scramble  for  provinces  which 
might  take  place  if  it  were  broken  up.  Par- 
ticularly have  they  feared  the  absorption  of 
Slavonic  provinces  by  Russia,  or  the  estab- 
lishment of  a  great  Slav  confederation  under 
Russian  leadership.  It  is  obvious,  however, 
that  the  mere  existence  of  the  Empire  consti- 
tutes a  perpetual  menace  to  the  peace  of 
Europe.  Its  internal  unrest  is  bound  to  be 
complicated  by  external  disputes  ;   its  purely 


THE   MENACE   OF   AUSTRIA  27 

dynastic  unity  renders  war  the  only  means 
of  creating  a  national  consciousness  and  the 
readiest  method  of  diverting  attention  from 
internal  troubles. 

It  may  therefore  be  questioned  whether  an 
unqualified  right  to  exist  can  be  conceded  to 
a  State  which  has  failed  to  secure  either  the 
good  or  the  consent  of  the  governed,  and 
which  by  its  nature  threatens  the  peace  of  its 
neighbours.  The  defect  does  not  lie  merely 
in  its  diversity.  Under  wiser  guidance  the 
Empire  might  have  become  a  federation  of 
autonomous  States,  and  its  races  have  been 
united  by  a  national  sentiment  based  on 
common  interests,  common  institutions,  and 
common  sympathies.  But  Austria-Hungary 
has  remained  in  essence  an  Empire  based 
on  force  and  subjugation.  It  has  thus  be- 
come one  of  the  prime  factors  of  the  present 
war  and  will  present  some  of  the  gravest 
problems  of  the  future  peace. 

We  have  seen  that  the  policy  imposed 
upon  the  Austrian  Government  by  the  char- 
acter of  the  Empire  involved  perpetual  inter- 
ference in  the  affairs  of  the  Balkans.  This 
position  was  accentuated  by  the  mandate 
which  Austria  received  in  1878  to  administer 
Bosnia    and    Herzegovina.     To    these    pro- 


28  THE   ORIGINS   OF   THE   WAR 

vinces  she  has  undoubtedly  given  greater 
material  prosperity  and  sounder  administra- 
tion than  they  ever  before  possessed  ;  but 
her  rule  was  bitterly  resented  by  the  Serbo- 
Croat  population.  It  was  always  anticipated 
that  her  occupation  would  result  in  formal 
annexation,  and  it  thus  formed  an  additional 
obstacle  to  the  national  aspirations  of  the 
Serbs. 

The  most  serious  consequence  of  Austria's 
Balkan  policy,  however,  was  to  bring  her 
into  continual  opposition  to  that  of  Russia. 
The  Russian  Government  has  always  claimed, 
both  on  racial  and  religious  grounds — as  re- 
presenting the  greatest  Slavonic  Power  and 
the  greatest  Power  of  Greek  Christendom — 
to  be  the  champion  of  the  Christian  popu- 
lations against  the  Turk.  In  this  claim  they 
are  probably  supported  by  the  mass  of  the 
people.  Public  opinion  in  Russia  is  not 
highly  developed,  but  if  any  Russian  policy 
can  truly  be  termed  national,  it  is  that 
which  involves  championship  of  the  Slavonic 
and  Orthodox  peoples  against  foreign,  espe- 
cially Turkish,  domination.  It  is  probable 
that  this  championship  has  not  always 
been  disinterested  on  the  part  of  Russian 
statesmen.    They  have  desired  to  see  Russia 


RUSSIA  AND  THE  BALKANS  29 

the  leader,  as  well  as  the  protector,  of  the 
Southern  Slavs ;  and  their  wish  to  expel  the 
Turk  from  Constantinople  may  have  been 
dictated  as  much  by  the  desire  for  an  ice-free 
port  as  by  the  desire  to  replace  the  cross 
on  St.  Sophia.  The  suspicion  of  these  mo- 
tives has,  in  fact,  at  various  times  alienated 
the  Balkan  States  from  Russia  for  consider- 
able periods.  Nevertheless,  Russian  policy 
has,  in  the  main,  stood  for  the  liberation  and 
free  development  of  the  races  subject  to 
Turkish  misrule,  as  Austrian  policy  has  stood 
for  weakening  and  repressing  them.  And 
if  the  conduct  of  the  Russian  Government 
with  regard  to  Turkey  has  on  occasion  been 
aggressive  beyond  the  provocation  of  the 
moment,  we  are  at  least  free  to  admit  that 
the  Turk  has  proved  incorrigible.  His  domin- 
ation, to  an  extent  still  greater  than  that  of 
the  Austrian  or  Magyar,  has  been  founded 
on  force  and  on  force  alone,  and  the  existence 
of  his  Empire  was  incompatible  with  the 
establishment  of  public  right  in  Europe.  It 
is  one  of  the  cardinal  defects  of  Austria's 
policy  of  sowing  dissension  between  the 
Balkan  peoples  that  it  has  played  into  the 
hands  of  Turkey. 
This  struggle  for  prestige  in  the  Balkans 

4 


30  THE   ORIGINS   OF   THE   WAR 

between  Austria  and  Russia  was  accentuated 
by  the  formation  of  the  Triple  Alliance  in 
1882-3  between  Austria,  Germany,  and  Italy, 
and  the  advent  of  German  influence  in  Balkan 
politics.  It  culminated  in  1908  when  Austria 
took  advantage  of  the  Young  Turk  Revolu- 
tion to  announce  her  formal  annexation  of 
Bosnia  and  Herzegovina,  the  indignation  of 
Serbia  and  the  protest  of  the  Russian  Govern- 
ment being  met  by  Germany's  appearance  "  in 
shining  armour  "  by  the  side  of  her  ally. 

Through  the  whole  tortuous  maze  of  Balkan 
politics  the  statesmen  of  Vienna  and  Buda- 
Pesth  have  steadily  pursued  one  single  aim 
— the  maintenance  of  that  system  of  repres- 
sion and  subjugation  upon  which  the  Austro- 
Hungarian  Empire  is  founded.  To-day  they 
have  their  reward  in  alliance  with  Turkey 
and  war  with  Russia. 

So  far  we  have  been  dealing  chiefly  with 
the  nations  immediately  concerned  in  the 
Austro-Serbian  dispute.  We  have  to  turn 
now  to  the  factors  which  have  extended  the 
struggle  so  far  beyond  their  borders. 

The  unification  of  Germany  and  her  rise 
to  a  great  Power  were  the  outstanding  facts 
of  European  history  in  the  latter  half  of  the 
nineteenth  century.     The  facts  are  too  well 


THE   UNIFICATION   OF   GERMANY  31 

known  to  need  repetition.  It  will  be  enough 
to  point  out  briefly  those  which  seem  most 
pertinent  to  the  present  situation. 

In  the  eighteenth  century  Germany  con- 
sisted of  a  large  number  of  States  of  varying 
size  and  power,  very  loosely  connected  and 
having  no  corporate  consciousness.  The  poli- 
tical organisation  of  the  German  people  had 
never  completely  recovered  from  the  chaos 
of  the  Thirty  Years'  War.  The  most  distin- 
guished German  writers  and  thinkers  had 
adopted  a  purely  cosmopolitan  attitude. 
Such  patriotism  as  existed  among  the  peoples 
of  the  various  States  was  purely  provincial. 
The  policies  of  the  many  governments  were 
dynastic  rather  than  national.  Prussia  stood 
out  from  the  other  States  by  reason  of  the 
ability  with  which  successive  rulers  had 
laboured  to  obtain  weight  in  the  councils  of 
Europe  through  an  almost  exclusive  concentra- 
tion upon  military  development.  Her  policy 
had  been  violently  aggressive,  and — from  the 
dynastic  standpoint — remarkably  successful. 

One  result  of  the  disasters  of  the  Napo- 
leonic Wars  was  the  birth  of  an  impulse 
towards  German  unity.  The  continual  inter- 
ference of  France  in  German  affairs,  notably 
under   Louis   XIV   and   Napoleon,    and   the 


32  THE   ORIGINS   OF   THE   WAR 

military  and  political  weakness  entailed  by 
division,  gave  rise  to  a  desire  for  some  form 
of  unification  which  would  enable  the  Ger- 
man people  to  hold  their  own  and  free  them 
from  the  fear  of  foreign  dictation.  The  forma- 
tion of  the  Zollverein  or  customs  union,  which 
by  185 1  included  practically  all  the  German 
States  with  the  exception  of  Austria,  gave 
them  a  sense  of  common  interests  and  paved 
the  way  to  political  union.  In  the  move- 
ment towards  political  unity,  the  military 
strength  of  Prussia  marked  her  out  as  the 
natural  leader,  and  under  the  guidance  of 
Bismarck,  Prussian  policy  aimed  equally  at 
the  unification  of  Germany  and  the  establish- 
ment of  a  Prussian  hegemony.  In  the  wars 
of  1864,  1866,  and  1870-71,  and  in  the 
diplomatic  conflicts  which  preceded  and  ac- 
companied them,  the  reorganised  military 
power  of  Prussia  and  the  diplomatic  ability  of 
Bismarck  were  directed  steadily  and  ruthlessly 
to  this  end,  which  was  finally  achieved  in  187 1 
by  the  creation  of  the  German  Empire. 

With  the  desire  of  the  Germans  for  unity 
it  is  possible  to  sympathise  deeply,  as  the 
majority  of  Englishmen  in  fact  did.  A  sur- 
vey of  German  history  and  of  the  sufferings 
which  their  divisions  had  entailed  upon  the 


THE   LEADERSHIP   OF   PRUSSIA  33 

German  people  renders  it  possible  to  under- 
stand how  German  statesmen  could  feel  that 
unity  to  be  a  primary  essential  of  their  policy, 
in  pursuit  of  which  they  were  not  much  to 
be  deterred  by  scruples.  It  was  an  end 
which,  according  to  the  traditional  morality 
of  politics,  might  be  held  to  justify  the 
means. 

Unhappily,  the  policy  of  the  German 
Government  since  unification  has  been  strongly 
coloured  by  the  "  blood  and  iron  "  theory  on 
which  it  was  founded.  That  policy,  in  so 
far  as  foreign  affairs  are  concerned,  has  been 
directed  by  Prussia,  and  the  Prussian  tradi- 
tions are  autocratic,  militarist,  and  aggressive. 
The  three  able  rulers  under  whom  Prussia 
first  became  a  Power,  the  Great  Elector, 
Frederick  William  I,  and  Frederick  the  Great, 
impressed  upon  her  institutions  and  policy 
a  character  which  they  have  never  lost.  The 
success  of  the  German  arms  in  1870-71 
under  Prussian  leadership  gave  to  that  policy 
a  prestige  by  which  the  German  peoples  have 
been  dazzled.  A  school  of  writers  and 
thinkers  has  grown  up  by  which  it  has  been 
erected  into  a  philosophy.  While  it  is 
possible  to  make  out  a  very  good  case  for 
Germany  in  the  confljc    of  1870-1871,  the 


34  THE    ORIGINS   OF   THE   WAR 

moral  effect  of  the  victory,  won  by  great 
superiority  of  numbers  and  of  organisation, 
has  been  to  plant  very  deeply  in  the  minds  of 
Germans  the  idea  that  "  God  is  always  on 
the  side  of  the  big  battalions.' '  From  being 
hailed  as  the  saviour  of  the  country,  the  army, 
especially  the  military  caste  from  which  the 
officers  are  drawn,  has  come  to  represent  the 
country  in  a  way  altogether  denied  to  the 
civil  population.  It  has  become  less  the 
servant  than  the  master  of  the  State.  From 
being  the  instrument  of  unification  the  armed 
force  of  Germany  has  become  a  threat  con- 
stantly thrown  into  the  diplomatic  scale. 

Germany,  therefore,  represents,  like  Austria, 
a  government  founded  largely  upon  force. 
Far  more  racially  homogeneous,  she  has 
her  own  subject  populations.  The  Poles 
of  Posen  and  Silesia,  the  Danes  of  Northern 
Schleswig,  the  majority  of  the  inhabitants  of 
Alsace-Lorraine,  have  never  accepted  German 
nationality.  The  annexation  of  Alsace-Lor- 
raine after  the  war  of  1870-71  not  only 
created  for  Germany  a  very  difficult  internal 
problem,  but  left  in  the  minds  of  the  French 
a  permanent  resentment  which  has  formed  a 
chief  factor  in  the  problems  of  German  foreign 
policy.     The  fear  expressed  by  Gladstone  that 


ALSACE-LORRAINE   AND   GERMAN    POLICY         35 

this  annexation  would  prove  to  be  "  the  be- 
ginning of  a  new  series  of  European  complica- 
tions "  has  been  amply  justified.     It  is  said 
that  Bismarck  doubted  the  wisdom  of  the 
step,  but  was  overruled  by  Moltke  and  Roon 
on  the  ground  of  military  necessities.     It  is 
true  at  any  rate  that  by  annexing  the  pro- 
vinces the  German  Government  purchased  a 
strategical  advantage  in  war  by  the  accep- 
tance of  political  relations  which  greatly  in- 
creased the  risk  of  war.     It  was  the  Alsace- 
Lorraine  question  more  than  anything  else 
which  stood  in  the  way  of  reconciliation  be- 
tween France  and  Germany.     The  continued 
tension  between  those  Powers  has  been  the 
prime  factor  in  the  armament  competition. 
In    this    competition    France    found    herself 
badly  handicapped  by  her  stationary  popu- 
lation.    Her  colonial  expansion  had  created 
friction  with  Great  Britain  and  Italy,   and 
feeling  herself  thus  threatened  both  on  land 
and  on  sea,  she  formed  an  alliance  with  Russia 
which  balanced  to  some  extent   the  Triple 
Alliance,  but  which  had  the  effect  of  bringing 
France   within   the   zone   of   disturbance   of 
Eastern  politics. 

This  was  the  more  important  because  the 
desire  of  the  German  Government  to  carve 


36  THE   ORIGINS   OF   THE   WAR 

out  a  sphere  of  influence  in  Asiatic  Turkey, 
and  their  alliance  with  Austria,  had,  as  we 
have  seen,  brought  German  policy  into  colli- 
sion with  Russian,  in  spite  of  the  traditional 
friendship  between  the  Courts  of  Petrograd 
and  Berlin.  A  considerable  popular  hostility 
had  also  come  into  being.  German  merchants 
and  landowners  had  made  themselves  very 
unpopular  in  Russia,  and  it  was  believed 
that  German  officials  and  German  influence 
were  largely  responsible  for  the  reactionary 
policy  of  the  bureaucracy.  On  the  other 
hand,  the  Germans  despised  the  Russians 
as  semi-barbarians,  and  their  lack  of  a 
strong  natural  frontier  to  the  east  rendered 
them  highly  susceptible  to  the  suggestion  of 
a  Slav  menace.  Thus  the  Dual  Alliance, 
while  it  greatly  strengthened  the  position  of 
France,  increased  for  her  the  risk  of  war, 
by  adding  to  the  friction  caused  by  her  own 
quarrels  with  Germany  that  which  was  spring- 
ing up  between  the  latter  Power  and  Russia. 

Meantime  the  remarkable  development  of 
German  commerce  and  the  desire  for  colonial 
expansion  had  led  to  the  creation  of  a  great 
German  navy  and  a  colonial  policy  somewhat 
too  frequently  strengthened  by  the  shaking 
of  the  "  Mailed  Fist."     Within  comparatively 


GERMANY  AND  THE  ENTENTE  37 

recent  years  the  expansion  of  the  German 
fleet  has  been  urged  in  a  manner  which 
seemed  to  many  to  be  inspired  by  definite 
rivalry  with  Great  Britain.  Coupled  with 
German  military  supremacy  and  the  aggres- 
sive tone  of  German  diplomacy,  it  has  led  to 
the  belief  that  Germany  was  aiming  at  a 
world  supremacy  to  be  achieved  by  force.  The 
settlement  of  the  various  points  of  friction 
between  France  and  Great  Britain  and  the 
development  of  the  subsequent  Entente  were 
unfortunately  regarded  by  Germans  as  part 
of  a  policy  of  encircling  Germany  by  which 
her  expansion  was  to  be  restricted.  At  the 
same  time  some  of  her  publicists  appeared  to 
be  infected  with  the  idea  that  that  expansion 
could  only  be  achieved  at  the  expense  of 
Great  Britain.  All  these  factors  tended  more 
and  more  to  embitter  Anglo-German  relations 
and  to  embark  Great  Britain  upon  support 
of  France  and  of  the  Dual  Alliance  against 
Germany  and  Austria.  The  situation  was 
complicated  by  the  common  belief  that  in 
any  war  between  France  and  Germany,  the 
latter  Power  would  not  scruple  to  violate  the 
neutrality  of  Belgium,  which  was  guaranteed 
by  France,  Germany,  and  Great  Britain. 
Both  the  writings  of  German  strategists  and 


38  THE   ORIGINS   OF   THE   WAR 

the  disposition  of  the  German  military  rail- 
ways pointed  to  the  possibility  of  Germany 
attempting  in  this  way  to  turn  the  great  line 
of  French  fortresses  stretching  from  Belfort 
to  Verdun. 

The  irritation  set  up  on  both  sides  of  the 
North  Sea  was  aggravated  by  pan-German 
writers  who  talked  of  the  incorporation  in 
the  German  Empire  of  Holland  and  Belgium, 
and  the  wresting  from  Great  Britain  of  her 
naval  and  colonial  supremacy,  and  by  a 
tendency  on  the  part  of  certain  sections  of 
public  opinion  in  Great  Britain  to  exaggerate 
the  menace  to  British  interests  of  Germany's 
commercial  and  naval  expansion. 

The  friction  created  by  all  these  factors 
culminated  in  the  Morocco  crisis  of  1911,  when 
Britain  stepped  in  to  the  support  of  France 
and  in  the  establishment  of  an  understand- 
ing— never  very  clearly  defined — between  the 
British  and  French  Governments  for  mutual 
support  in  the  event  of  German  aggression. 
The  London  Conference  of  1913  at  the  end  of 
the  Balkan  Wars,  when  both  the  British  and 
German  diplomatists  worked  cordially,  under 
the  leadership  of  Sir  Edward  Grey,  for  the 
preservation  of  European  peace,  indicated  a 
slackening  of  the  tension  ;    and  it  was  very 


THE    GROUPING   OF   THE   POWERS  39 

generally  believed  that  the  danger  of  actual 
conflict  had  begun  to  recede  and  that  the 
way  was  opening  for  some  such  agreement 
as  had  settled  our  disputes  with  France ; 
but  the  elements  of  danger  still  remained, 
and  the  truculence  of  German  diplomacy  in 
the  negotiations  preceding  the  present  war 
was  ill  calculated  to  avoid  them. 

These,  then,  were  the  main  factors  of  the 
situation  which  produced  the  war.     On  the 
one  side  were  the  Austro-Hungarian  Empire 
based  on  the  principle  of  domination  without 
regard  to  national  aspirations  and  the  Ger- 
man Empire  founded  by  a  policy  of  blood 
and  iron   and   still  ruled   by   its  traditions. 
On   the   other   side   were   Russia,   regarding 
herself    as   the    natural   champion    of   those 
Slav    peoples    over    part    of    which    Austria 
ruled  ;  France,  still  smarting  under  the  recol- 
lection of  her  defeat ;  and  Great  Britain,  in- 
creasingly  suspicious   of   German   aggression 
upon    her    trade    and    colonies.     Both    sides 
were  armed  to  the  teeth  ;    both — in  varying 
degrees — were  dominated  by  the  idea  of  the 
identity    of    military    power    with    national 
prosperity  ;    one  side  at  least  regarded  war 
and  the  threat  of  war  as  the  most  effective 
card  in  the  diplomatic  game. 


40  THE   ORIGINS   OF   THE   WAR 

Into  this  powder  magazine,  the  Austrian 
ultimatum  to  Serbia  threw  the  necessary 
spark.  Russia  stepped  in  to  protect  Serbia ; 
Germany  was  bound  by  her  alliance  and  by 
all  the  traditions  of  her  diplomacy  to  support 
Austria,  right  or  wrong  ;  France  was  bound 
by  alliance  with  Russia ;  Great  Britain 
dreaded  the  establishment  of  an  overwhelm- 
ing and  aggressive  German  power  and  was 
under  obligations  to  France.  The  last  chance 
of  British  neutrality  was  destroyed  when 
Germany,  for  purely  strategical  reasons,  vio- 
lated the  neutrality  ot  Belgium,  which  Britain, 
France,  and  Germany  were  alike  bound  by 
treaty  to  protect.  In  this  way,  the  rejection 
by  Serbia  of  a  couple  of  clauses  in  the  Austrian 
note  involved  in  war  every  great  Power  of 
Europe  except  Italy.  Italy  was  indeed  a 
member  of  the  Triple  Alliance  with  Germany 
and  Austria,  but  her  people  hated  the  Aus- 
trians  from  whose  yoke  they  had  escaped  by 
the  assertion  of  that  spirit  of  nationality  of 
which  Austria  was  the  embodied  denial ; 
her  differences  with  France  had  been  com- 
posed ;  she  was  exhausted  by  her  Tri- 
politan  adventure,  and  she  refused  to 
recognise  in  this  conflict  a  war  of  de- 
fence    in     the     terms     of    the    treaty    of 


THE   OUTBREAK   OF   WAR  41 

alliance.       She    consequently     declared    her 
neutrality. 

Speaking  broadly  and  having  regard  rather 
to  the  general  principles  involved  than  to 
the  details  of  diplomatic  history,  we  may  say 
that  the  outbreak  of  war  was  due  to  the 
working  of  the  theory  of  domination  in 
Austria's  Balkan  policy  and  that  its  exten- 
sion to  nearly  the  whole  of  Europe  was  due 
in  the  first  place  to  German  support  of  that 
policy  and  in  the  second  place  to  the  theory 
of  international  rivalry  which  had  divided 
the  great  Powers  into  two  hostile  and  mutually 
suspicious  groups.  If  any  settlement  is  to 
be  effected  which  will  give  some  measure  of 
security  against  a  repetition  of  the  catas- 
trophe it  must  take  account  of  these  factors. 


CHAPTER    III 

THE   PRINCIPLES   OF  THE   SETTLEMENT 

There  are  a  good  many  people  who  consider 
it  a  waste  of  time  to  discuss  a  general  settle- 
ment at  all.  In  their  view  one  thing  only  is 
necessary — the  complete  defeat  of  Germany 
and  her  reduction  to  such  a  condition  of 
military  weakness  as  shall  render  it  impos- 
sible for  her  again  to  disturb  the  peace  of 
Europe.  They  do  not  care  very  much  about 
the  settlement  of  disputes  ;  all  that  matters 
in  their  opinion  is  that  the  terms  of  peace 
shall  be  dictated  in  Berlin  and  that  they 
shall  be  sufficiently  onerous.  Germany,  we 
are  told,  is  to  be  crushed,  her  capital  occupied, 
her  fleet  confiscated,  her  finances  crippled  by 
indemnities,  large  portions  of  her  territory 
alienated,  her  government  forcibly  upset, 
her  empire  split  up  into  a  number  of  weak 
and  divided  States.  Above  all,  her  military 
power  is  to  be  permanently  destroyed. 

In  considering  this  programme,  there  are 
42 


THE    NECESSITY   OF   VICTORY  43 

two  things  which  must  be  kept  in  mind. 
In  the  first  place,  its  feasibility  or  desir- 
ability is  a  question  altogether  apart  from 
that  of  achieving  military  victory.  It  is 
certain  that  the  British  nation  as  a  whole 
will  not  be  satisfied  with  a  drawn  war. 
There  are  two  very  good  reasons  for  this  atti- 
tude in  addition  to  the  natural  desire  to  come 
out  on  top  in  any  struggle  in  which  we  may 
be,  however  reluctantly,  involved.  In  the 
first  place,  it  is  very  unlikely  that  the  German 
and  Austrian  Governments  would  consent, 
except  under  the  pressure  of  decisive  defeat 
or  extreme  exhaustion,  to  any  terms  which 
would  secure  the  objects  that  we  have  set 
ourselves  to  achieve.  In  the  second  place, 
it  is  only  by  the  military  defeat  of  Germany 
that  the  Prussian  military  caste  can  be  dis- 
credited in  the  eyes  of  the  German  people. 
The  defeat  of  Germany  is  a  necessary  pre- 
liminary to  the  possibility  of  any  satisfactory 
settlement,  and  no  difference  of  opinion  as  to 
the  best  use  which  can  be  made  of  victory 
has  any  bearing  upon  our  resolution  to 
accomplish  it. 

It  is  also  important  to  bear  in  mind  that 
to  question  the  possibility  or  the  wisdom  of  a 
programme  of  dismemberment  does  not  imply 


44  THE   PRINCIPLES   OF   THE   SETTLEMENT 

"  pro-German "  tendencies  or  condonement 
either  of  Prussian  policy  or  of  crimes  com- 
mitted by  Germans  in  Belgium  or  elsewhere. 
It  involves  merely  a  sense  of  proportion  and  a 
steady  regard  to  the  objects  for  which  we  are 
righting.  What  we  have  to  ask  ourselves  is 
simply  whether  this  "  crushing  "  of  Germany 
is  a  practicable  operation,  and  whether,  if 
practicable,  it  would  promote  these  ends. 

"  Our  great  object,"  wrote  Wellington  to 
Castlereagh  in  the  course  of  the  negotiations 
which  followed  Waterloo,  "  is  the  peace  of 
the  world"  ;  and  this  defines,  broadly,  the 
object  of  the  Allies  in  the  present  war.  It 
is  this  object,  certainly,  which  the  British 
nation  has  set  before  itself.  We  have  not 
gone  into  this  war  for  the  purpose  of  terri- 
torial aggrandisement  or  material  gain.  Our 
determination  to  do  and  to  endure  whatever 
may  be  required  of  us  as  the  price  of  victory, 
is  inspired  by  the  hope  of  winning  for  our- 
selves and  for  Europe  the  most  complete 
security  which  can  be  found  against  a  repe- 
tition of  this  great  catastrophe.  We  are 
animated  by  the  vision  of  a  Europe  which 
shall  be  free  from  the  perpetual  menace  of 
enormous  forces  controlled  by  a  Government 
dominated    by   the    doctrine    that    military 


THE   ALLIES'    SUPREME   DUTY  45 

power  is  in  itself  the  be-all  and  end-all 
of  the  State,  and  that  armed  aggression, 
dictated  only  by  opportunity,  is  the  proper 
expression  of  that  power.  This  is  how  the 
situation  presents  itself  to  the  bulk  of  the 
nation,  and  we  believe  that  a  similar  spirit 
animates  our  Allies.  The  one  question  of 
importance  for  us  is  to  discover  the  best 
means  of  accomplishing  this  end.  It  is  our 
business  neither  to  humiliate  Germany  nor 
to  spare  her  humiliation,  but  to  secure  the 
peace  and  liberties  of  Europe — it  is  to  this 
that  our  honour  is  pledged  ;  it  is  this  which 
is  our  supreme  interest ;  the  rest  is  inci- 
dental. Whatever  our  view  of  German 
character  or  of  German  conduct,  our  duty 
remains  the  same — to  secure  ourselves  and 
Europe  generally  against  a  repetition  of  the 
catastrophe  of  191 4.  With  this  duty  neither 
the  sentiment  of  pity  nor  the  sentiment  of 
indignation  can  be  allowed  to  interfere. 

In  the  first  place,  we  have  to  consider  how 
far  this  "  crushing  "  of  Germany  is  feasible. 
It  is  well  to  remember  that  the  experiment 
has  been  tried.  The  campaign  of  Jena  and 
Auerstadt  laid  Prussia  prostrate  at  the  feet 
of  Napoleon.  The  ruin  of  her  armies  was 
complete  and  irretrievable.  Napoleon  pro- 
5 


46  THE   PRINCIPLES   OF   THE   SETTLEMENT 

ceeded  to  impose  terms  which  should  crush 
her  so  effectually  as  to  render  a  revival  of 
her  power  impossible.  By  the  Treaty  of 
Tilsit,  Prussia  was  deprived  of  nearly  half 
her  area  and  population  ;  she  lost  all  her 
territory  west  of  the  Elbe,  her  Polish  pro- 
vinces, the  southern  part  of  West  Prussia, 
Dantzig.  A  French  army  of  100,000  men 
was  to  remain  in  occupation  until  contribu- 
tions, to  an  undetermined  amount,  had  been 
paid.  By  a  subsequent  convention,  after 
very  heavy  contributions  had  been  exacted 
and  the  French  troops  withdrawn,  Prussia 
was  forbidden  to  maintain  an  army  of  more 
than  42,000  men,  or  to  organise  a  militia. 

The  remaining  German  States  had  come 
equally  under  the  heel  of  Napoleon.  He 
carved  out  of  them  the  Kingdom  of  West- 
phalia for  his  brother  Jerome  ;  he  grouped 
them,  divided  them,  arranged  them  as  he 
pleased  ;  he  imposed  on  them  French  institu- 
tions, he  linked  them  politically  to  France. 
The  last  spark  of  German  liberty  appeared 
to  be  extinct. 

It  must  be  remembered  that  there  was 
then  no  German  national  consciousness. 
There  were  Prussians,  Bavarians,  Wurtem- 
bergers,  but  no  "  Germans."     German  culture 


PRUSSIA   AND    NAPOLEON  47 

was  cosmopolitan,  the  patriotism  of  her 
peoples  so  far  as  it  existed  was  purely  local. 
The  record  of  Prussia  was  that  of  a  militarist 
and  aggressive  State  using  her  disproportion- 
ately large  army  for  continual  self-aggrand- 
isement at  the  expense  of  her  German 
neighbours.  Moreover,  the  institutions  in- 
troduced by  Napoleon  into  many  of  the 
German  States  constituted  a  real  advance  in 
political  civilisation.  In  fact,  the  ideas  of 
the  French  Revolution,  the  Code  and  the 
institutions  of  Napoleon,  represented  much 
towards  which  the  most  progressive  minds 
of  Germany  had  been  striving.  The  only 
objection  to  them  was  that  they  had  been 
imposed  by  a  conqueror. 

For  some  years  Prussia  and  Germany 
generally  seemed  to  have  disappeared  from 
the  political  map.  They  were  actually  com- 
pelled to  furnish  contingents  for  the  invasion 
of  Russia  ;  their  power  and  spirit  alike  seemed 
to  have  been  broken.  Under  the  surface, 
however,  great  changes  had  taken  place. 
The  Government  of  Prussia — autocratic  and 
reactionary — took  its  courage  in  its  hand  and 
appealed  to  the  people.  Serfdom  was  abol- 
ished ;  many  reforms  were  introduced.  Von 
Humboldt  inaugurated  a  great  campaign  of 


48  THE   PRINCIPLES   OF   THE    SETTLEMENT 

national  education.  Meanwhile,  Scharnhorst 
reorganised  the  army,  evading  the  imposed 
limitations  by  a  system  of  short  service  and 
intensive  training.  More  important  than  all, 
the  sentiment  of  German  nationality,  the 
desire  for  German  unity,  was  awakened.  The 
intellectual  leaders  of  Germany — Fichte  very 
notably — abandoned  their  philosophic  cosmo- 
politanism to  become  the  mouthpiece  of  these 
sentiments.  Prussia  took  the  lead  in  this 
movement  and  the  most  brilliant  men  of  the 
other  German  States,  Stein,  Bliicher,  Harden- 
berg,  Scharnhorst,  Gneisenau,  were  proud  to 
act  as  the  instruments  of  her  regeneration  ; 
while  the  autocratic  Hohenzollern  house  be- 
came the  symbol  of  German  hopes. 

Within  seven  years  of  the  crushing  of 
Prussia  and  the  humiliation  of  Germany, 
Napoleon  found  himself  fighting  desperately 
and  unsuccessfully  against  an  alliance  of 
which  Prussia  was  the  animating  spirit  and 
one  of  the  most  powerful  constituents.  The 
Confederation  of  the  Rhine  fell  to  pieces  at 
the  first  shock.  At  Leipzig  the  Saxons  de- 
serted en  bloc  to  the  Allies ;  Bavarians, 
Hessians,  troops  from  Nassau  and  Baden 
entered  France  alongside  with  the  Prussians, 
Austrians,  and  Russians.     By  the  Treaty  of 


THE   IMPOSSIBILITY   OF        CRUSHING        GERMANY      49 

Paris  Prussia  regained  all  and  more  than  she 
had  lost ;  but  the  real  result  of  the  Peace  of 
Tilsit  was  the  creation  of  that  impulse  towards 
German  unity  which  found  its  fruition  in  1871. 
What  guarantee  is  there  that  Germany  can 
be  crushed  in  1915  or  1916  more  permanently 
than  in  1808  ?  Improved  means  of  produc- 
tion have  probably  rendered  the  recuperative 
powers  of  modern  States  even  greater  than 
those  shown  by  Prussia  after  Jena,  by  France 
after  1871.  Enforced  restrictions  upon  arma- 
ments will  be  evaded  as  they  were  by  Scharn- 
horst,  or  denounced  at  a  suitable  opportunity 
as  by  Russia,  when  in  1870  she  denounced 
the  clauses  of  the  treaty  of  1856  restricting 
the  fortification  of  Sebastopol  and  her  con- 
struction of  a  Black  Sea  fleet.  It  would,  of 
course,  be  possible,  in  the  event  of  overwhelm- 
ing victory,  to  secure  the  destruction  or 
surrender  of  such  portion  of  the  German  navy 
as  remained  intact  at  the  end  of  the  war  ; 
but  it  would  be  impossible  to  prevent  the 
Germans  from  straining  every  nerve  to  push 
through  a  great  programme  of  new  construc- 
tion. A  nation  can  be  prevented  from 
training  men  or  creating  material  of  war  only 
by  permanent  occupation  of  its  territory. 
To  suppose  that  sixty-five  or  seventy  million 


50  THE   PRINCIPLES   OF   THE   SETTLEMENT 

people  eminently  distinguished  by  productive 
energy  and  capacity  for  organisation  can  be 
reduced  to  permanent  military  impotence  is 
mere  childish  folly  which  may  appeal  to 
sensational  journalists  and  politicians  of  the 
dinner  table,  but  can  only  provoke  the 
laughter  of  soldiers  and  practical  statesmen. 
Its  folly  has  been  admirably  exposed  by  the 
military  correspondent  of  the  Times,  and  it  is 
worth  while  to  reproduce  his  summary  of 
the  whole  question  from  the  point  of  view  of 
those  who  would  be  responsible  for  carrying 
out  such  a  policy  : 

To  crush  the  Germans  as  a  whole  we  must  either 
kill  them  all  or  occupy  their  countries  permanently, 
and  we  do  not  want  to  substitute  one  tyranny  for 
another.  Nor,  we  can  be  sure,  does  Russia.  We  have 
to  draw  the  teeth  of  this  Prussian  monster,  to  humble 
a  military  caste,  and  to  leave  Prussia  herself  at  the  peace 
with  the  constitution  which  she  has  so  long  sought 
in  vain.  In  these  reasonable  aims  we  shall  sooner  or 
later  have  large  sections  of  the  German  people  with  us, 
and  our  ends  can  then  be  more  quickly  attained.  But  to 
kill  or  everlastingly  to  police  a  nation  of  sixty  millions 
of  people  is  an  extravagant  proposition,  and  in  war 
one  must  aim  at  what  is  attainable  and  not  the  reverse. 
This  is  a  military  as  well  as  a  political  question.  We 
must  not  impose  upon  strategy  an  impossible  task,  for 
if  we  do  we  may  be  unable  to  achieve  the  aims  which 
are  both  practicable  and  desirable.1 

1  Times,  September  24,  1914. 


THE   DANGERS   OF   DISMEMBERMENT  51 

These  considerations  apply,  equally,  to  all 
proposals  for  dissolving  the  German  Empire 
and   resolving   it    into    the   separate    States 
into  which  Germany  was  previously  divided. 
The   teaching   of    history   shows   that   such 
a   step   would   probably  make   of  itself   for 
European  unrest.     In  any  case  it  could  be 
imposed    upon   Germany   only   at    the   cost 
of  a  permanent    army  of   occupation   or  of 
perpetual  readiness  to  threaten  war.     It  is 
said,  indeed,  that  Prussia  is  loved  none  too 
well   by  the   South   German   States,    but   if 
Prussia  can  hold  herself  out  as  the  symbol  of 
resistance  to  foreign  interference  in  German 
affairs  she  will  draw  to  herself  Bavaria  and 
Saxony,    as   she    did    in    1813.     The    Social 
Democrats,    and    other    progressive    parties, 
whose  power  in  Germany  has  increased  with 
every   year,    have   been   bitter   and   uncom- 
promising opponents  of  Prussian  militarism. 
If  one  thing  is  certain,  it  is  that  the  final  over- 
throw of  militarism  in  Germany  must  come 
from   the    Germans    themselves.      If,   when 
the  power   of   German  militarism  has   been 
crushed  in  the  field,  the  German  people  are 
left   to   work  out   their   own   salvation,   the 
lessons  of  a   disastrous   war   will   be  driven 
home  by  the  progressive  and  anti-militarist 


52  THE   PRINCIPLES   OF   THE   SETTLEMENT 

parties  and  will  become  an  effective  weapon 
in  their  hands  ;  but  if  an  attempt  is  made 
to  destroy  that  militarism  by  force,  by  the 
imposition  of  vindictive  terms,  these  parties 
will  be  silenced.  A  political  system  imposed 
upon  the  country  by  the  armed  forces  of  the 
Allies  would  fall  to  pieces  the  moment  those 
forces  were  withdrawn.  We  believe  that  the 
future  both  of  Germany  and  of  Europe  de- 
pends upon  the  victory  of  the  Allies  ;  but 
it  depends  no  less  upon  that  victory  being 
used  with  a  wisdom  and  moderation  which 
will  avoid,  in  its  treatment  of  Germany,  the 
errors  of  German  policy. 

Even  if  it  were  feasible,  it  does  not  appear 
that  the  simple  process  of  crushing  Germany 
could  secure  permanent  peace.  We  have  seen 
already  what  are  the  root  causes  from  which 
wars  spring,  and  unless  these  deeper  causes 
are  removed  they  will  lead  to  conflict  in  the 
future  as  they  have  done  in  the  past,  whatever 
may  be  the  military  position  of  Germany. 

It  is  the  failure  to  take  these  deeper  ques- 
tions into  account  which  has  made  most 
treaties  of  peace  in  the  past  a  mere  matter 
of  bargaining,  in  which  one  side  asks  as  much 
and  the  other  gives  as  little  as  their  respective 
military  situations  permit.     A  peace  so  made 


PEACE  TREATIES  AND  THE  SEEDS  OF  WAR   53 

holds  almost  invariably  the  seeds  of  future 
wars. 

In  the  first  place,  a  peace  which  looks  no 
further  than  the  apparent  advantage  of  the 
moment  will  lay  the  foundations  for  a  war  of 
revenge.  The  more  onerous  the  terms  exacted 
the  deeper  will  be  the  resentment  of  the  van- 
quished, and  it  is  at  least  well  to  consider 
in  each  case  how  far  the  advantages  gained 
are  offset  by  the  cost  of  the  increase  in  arma- 
ments which  is  necessary  to  maintain  them, 
and  by  the  menace  of  future  conflict ;  or  how 
far  a  more  moderate  policy  might  avert  this 
threat.  It  was  on  this  principle  that  Castle- 
reagh  wrote  to  Liverpool  on  August  17,  181 5, 
concerning  the  suggested  annexation  of  cer- 
tain famous  fortresses:  "It  is  not  our  busi- 
ness to  collect  trophies,  but  to  try  and  bring 
back  the  world  to  peaceful  habits.  I  do  not 
believe  this  to  be  compatible  with  any  attempt 
now  materially  and  permanently  to  affect  the 
territorial  character  of  France  as  settled  by 
the  Peace  of  Paris."  '  It  is  necessary,  of 
course,  to  consider  every  case  upon  its  merits 
and  to  avoid  the  dangers  of  a  spectacular  and 

1  Castlereagh  to  Liverpool,  Paris,  August  17,  1815. 
Quoted  in  The  Confederation  of  Europe,  by  W.  Alison 
Phillips,  p.  143. 


54  THE   PRINCIPLES   OF   THE   SETTLEMENT 

sentimental  magnanimity,  but  the  principle 
itself  must  be  kept  in  mind  by  any  far-sighted 
statesmanship. 

Wars  of  revenge  are,  however,  the  crudest 
form  of  the  dangers  underlying  peace  treaties. 
It  is  not  always  the  vanquished  who  threatens 
the  future  peace  of  the  victor.  The  greater 
wars  of  European  history  have  not  been 
simple  duels  between  nation  and  nation.  As 
a  rule  an  alliance  has  been  formed  on  one 
side  or  the  other,  and  where  there  is  an 
alliance  new  sources  of  weakness  as  well  as 
of  strength  are  created.  If  the  statesmen 
of  allied  Powers  look  upon  a  treaty  of 
peace  as  a  mere  scramble  for  provinces  or 
fortresses,  if  their  policy  is  based  upon 
nothing  more  profound  than  the  apparent 
advantage  of  the  moment,  the  division  of 
the  spoils  is  terribly  apt  itself  to  become  a 
casus  belli,  as  it  did  with  the  Balkan  league 
in  1 91 3,  or  at  least  to  sow  the  seeds  of  future 
enmity  between  the  allies. 

Even  where  the  victor  has  no  allies  and  the 
vanquished  is  too  broken  to  make  future 
trouble  imminent,  a  prudent  statesman  will 
remember  that  the  governments  of  Europe 
tend  to  look  very  jealously  upon  the  acquisi- 
tion of  excessive  power  by  any  single  State, 


THE   DANGER   OF   CONQUERED   PROVINCES        55 

especially  if  its  policy  is  aggressive,  and  that 
the  balance  is  liable  to  be  restored  against 
it  by  a  regrouping  of  the  Powers. 

Of  all  fruits  of  victory  the  most  fertile  in 
seeds  of  unrest  are  conquered  provinces.  In 
this  category  we  do  not  include  provinces 
inhabited  by  a  population  allied  in  speech 
and  blood  to  the  victor,  whom  his  victory  sets 
free  from  an  alien  domination.  We  refer  to 
provinces  whose  inhabitants  are  alien  to  him  in 
blood  or  speech,  attached  by  every  tie  of  sym- 
pathy and  nationality  to  the  State  from  which 
they  are  torn — territories,  in  short,  which  are 
seized  and  held  by  right  of  conquest  pure  and 
simple.  Here  there  has  to  be  taken  into 
account  not  only  the  desire  of  the  defeated 
State  to  recover  its  lost  territory,  but  the 
effect  of  conquest  upon  the  conquering 
State  itself.  The  conquered  populations 
naturally  form  a  perpetual  source  of  unrest. 
A  government  which  has  been  imposed  by 
force — to  which  the  governed  have  never 
consented — can  only  be  maintained  by  force. 
Agitation  is  met  by  repression  ;  repression  in 
its  turn  provokes  agitation.  The  defeated 
State  is  watching  all  the  time  for  an  oppor- 
tunity of  reconquest.  Thus  the  whole  ten- 
dency of  conquest  and  subjugation  is  to  keep 


56  THE   PRINCIPLES   OF   THE   SETTLEMENT 

unrest  alive  and  to  impose  upon  the  policy 
and  institutions  of  the  conqueror  a  character 
increasingly  militarist  and  oppressive.  As- 
sace-Lorraine  and  Poland  have  not  only 
directly  complicated  the  foreign  policy  of 
Germany,  but  have  constantly  stood  in  the 
way  of  her  internal  progress. 

This  double  menace  of  external  and  in- 
ternal trouble  is  inseparable  from  all  artificial 
arrangements  of  territory.  So  long  as  pro- 
vinces and  peoples  are  regarded  merely  as 
pawns  in  the  diplomatic  game,  to  be  trans- 
ferred, by  force  or  bargain,  according  to  the 
presumed  requirements  of  dynastic  or  strategic 
interests,  a  settled  Europe  is  impossible. 
However  judiciously  they  are  balanced,  how- 
ever solemnly  they  are  guaranteed,  such 
arrangements  are  necessarily  devoid  of  per- 
manence. Representing  no  natural  principle 
of  growth,  they  are  without  cohesive  power 
and  are  at  any  time  liable  to  be  upset  by  the 
outbreak  of  rebellion  or  by  a  reshuffling  of  the 
political  cards.  The  State  which  is  based 
upon  such  an  arrangement  is  at  once  a 
temptation  to  its  neighbours'  cupidity  and 
a  menace  to  their  security ;  it  represents  a 
source  of  weakness  to  the  whole  European 
system. 


WHY  THE   CONGRESS   OF  VIENNA   FAILED         57 

It  was  on  this  rock  that  the  efforts  of 
the  Congress  of  Vienna  split.  The  mon- 
archs  and  statesmen  who  met  at  Vienna  in 
1814  and  1815  to  consider  the  future  of 
Europe  after  the  downfall  of  Napoleon  were 
mostly  reactionary  in  domestic  affairs  and 
were  largely  guided  by  selfish  motives  in  their 
outlook  on  foreign  politics.  Nevertheless  it 
is  only  just  to  admit  that  they  were,  on  the 
whole,  animated  by  a  sincere  desire  to  restore 
peace  to  the  world.  It  is,  indeed,  important 
to  recognise  this  fact,  in  order  that  we  may 
ascertain  the  reasons  for  their  failure.  Those 
reasons  may  be  briefly  summed  up  under  two 
main  headings.  They  based  their  policy 
upon  a  maintenance  of  the  existing  autocratic 
governments  and  they  strove  to  render  per- 
manent an  artificial  arrangement  of  the  map 
of  Europe. 

The  first  stumbling  block  became  embodied 
in  the  Holy  Alliance  of  Russia,  Austria,  and 
Prussia.  As  Alexander  I  fell  farther  and 
farther  away  from  his  early  liberalism  and 
came  more  and  more  under  the  influence  of 
the  reactionary  policy  of  Metternich,  the  idea 
of  the  Holy  Alliance  came  to  be  a  federa- 
tion of  the  Great  Powers  for  the  purpose  of 
repressing  revolution  in  any  European  State 


58  THE   PRINCIPLES   OF   THE   SETTLEMENT 

— whether  caused  by  a  national  uprising 
of  subject  races  or  by  revolt  against  a 
reactionary  autocracy.  Castlereagh,  to  whose 
conduct  in  the  negotiations  justice  is  seldom 
done,  put  his  finger  upon  the  fatal  flaw  in 
the  whole  idea,  in  the  following  words  : 

The  idea  of  an  Alliance  Solidaire  by  which  each  state 
shall  be  bound  to  support  the  state  of  succession,  govern- 
ment and  possession  within  all  other  states  from  violence 
and  attack,  upon  condition  of  receiving  for  itself  a 
similar  guarantee,  must  be  understood  as  morally  im- 
plying the  previous  establishment  of  such  a  system  of 
general  government  as  may  secure  and  enforce  upon  all 
kings  and  nations  an  internal  system  of  peace  and 
justice.  Till  the  mode  of  constructing  such  a  system 
shall  be  devised,  the  consequence  is  inadmissible,  as 
nothing  could  be  more  immoral,  or  more  prejudicial  to 
the  character  of  government  generally,  than  the  idea 
that  their  force  was  collectively  to  be  prostituted  to 
the  support  of  established  power,  without  any  considera- 
tion of  the  extent  to  which  it  was  abused.1 

As  the  Holy  Alliance  degenerated  more 
and  more  into  a  mutual  guarantee  of  auto- 
cracy, Great  Britain  withdrew  more  and 
more  from  co-operation  with  it,  and  all 
through  the  history  of  the  Confederation 
this  conflict  of  principle  between  the  British 

1  Memorandum  on  the  Treaties  presented  to  the  Powers 
at  Aix-la-Chapelle.  Quoted  in  The  Confederation  of  Europe, 
by  W.  Alison  Phillips,  p.  25. 


GREAT  BRITAIN  AND  THE  HOLY  ALLIANCE   59 

and  the  continental  governments  went  far 
to  paralyse  its  efforts. 

The  scope  which  the  British  Government 
assigned  to  the  Confederation  was  narrower. 
They  were  averse  on  principle  to  intervention 
in  internal  affairs,  though  they  made  an 
exception  in  the  case  of  France,  where  they 
regarded  the  rule  of  Napoleon  as  a  menace 
to  the  peace  of  Europe.  They  thought  that 
the  Confederation  should  limit  its  aims  to  the 
overthrow  of  Napoleon,  security  against  re- 
newed aggression  on  the  part  of  France,  and 
a  system  of  treaties  which  would  secure  the 
territorial  arrangements  made  at  the  peace. 
It  was  this  policy  which  did  in  fact  prevail 
at  the  Congress  of  Vienna,  and  if  it  failed 
of  permanent  results  it  gave  nevertheless  a 
period  of  comparative  freedom  from  warfare 
which  enabled  the  nations  to  recuperate  from 
their  twenty  years'  struggle. 

That  this  settlement  failed  of  perman- 
ence was  due  in  the  main  to  the  other 
essential  flaw  in  the  policy  of  the  Congress. 
The  territorial  arrangements  embodied  in  the 
treaties  were  largely  artificial,  based  rather 
upon  a  dynastic  status  quo  than  upon  national 
boundaries.  It  is  probable  that  no  better 
solution    could    have    been    reached    at    the 


60  THE   PRINCIPLES   OF  THE   SETTLEMENT 

time.  Neither  in  Germany  nor  in  Italy  had 
the  revival  of  national  feeling,  the  desire  for 
unity,  yet  taken  definite  shape.  The  crying 
need  of  Europe  was  for  peace  almost  at  any 
price,  and  it  would  probably  have  been 
impossible  to  secure  that  peace  if  the  dynastic 
claims  of  the  various  princes  had  not  been 
respected.  The  peoples  of  Europe  had  no 
effective  control  of  policy  ;  the  policies  of 
most  of  the  princes  were  essentially  personal 
and  selfish  ;  it  was  a  question  of  buying 
their  support  by  almost  any  terms  on  which 
a  period  of  peace  could  be  purchased. 

Such  a  settlement,  however,  could  not,  in 
its  nature,  be  permanent.  The  French  Revo- 
lution had  re-awakened  at  once  the  spirit  of 
liberty  and  the  spirit  of  nationality.  The 
excesses  of  the  Revolutionary  party  and  the 
aggressions  of  Napoleon  had  for  a  time 
united  the  rest  of  Europe  in  a  Confederation 
whose  policy  was  based  upon  maintenance 
of  established  order  with  little  regard  for 
the  new  spirit.  But  the  new  wine  could 
not  long  be  kept  in  the  old  bottles.  The 
peoples  who  had  so  generously  supported 
their  governments  against  Napoleon  saw 
themselves  cheated  of  their  reward.  The 
desire  for  national  unity  and  independence 


THE   PRINCIPLE   OF  NATIONALITY  6l 

became  too  strong  to  be  restrained  by  an 
artificial  arrangement  of  boundaries.  The 
risings  of  1848  in  Vienna,  Prague,  Cracow, 
Sicily,  the  barricades  in  Paris,  the  revolt  of 
Schleswig-Holstein,  the  conflict  between  Aus- 
tria and  Hungary,  between  Austria  and 
Sardinia,  marked  at  once  the  limit  of  the 
reaction  and  the  bursting  by  the  national 
spirit  of  the  artificial  bonds  imposed  upon 
it.  Some  of  these  uprisings  were  successful, 
some  of  them  were  crushed.  But  where  they 
were  crushed  it  was  by  the  exercise  of  sheer 
force.  The  problems  remained,  some  of  them 
to  be  settled  by  later  wars  and  insurrections, 
some  of  them  to  trouble  us  to-day. 

It  will  be  as  well  to  define  what  we  mean 
by  this  principle  of  nationality,  the  non- 
observance  of  which  by  the  Congress  of  Vienna 
deprived  its  decisions  of  permanence.  It 
is  the  more  important  to  do  this,  because 
there  is  a  tendency  in  discussing  the  pro- 
blems presented  by  the  present  war  to  con- 
fuse nationality  with  race.  Race  is  indeed 
one  of  the  factors  of  nationality,  but  it  is 
not  the  whole.  In  Great  Britain  a  nation 
has  been  formed  by  the  fusion  of  widely 
different  races.  In  Belgium  two  strongly 
marked  races,  without  fusion,  have  united 
6 


62  THE   PRINCIPLES   OF   THE   SETTLEMENT 

to  form  a  genuine  nation.  In  Serbia  and 
Montenegro  we  have  two  distinct  nations 
though  only  one  race. 

By  a  nation  we  mean,  broadly  speaking, 
a  population  united  by  common  interests, 
common  institutions,  common  sympathies, 
common  traditions,  and  a  common  history, 
and  by  a  consciousness  of  unity  which  leads 
it  to  desire  a  common  government.  In 
general  this  involves  community  of  race  or 
at  least  of  speech  ;  but  in  some  cases,  such 
as  Belgium  and  Switzerland,  we  find  men  who 
differ  in  blood  and  speech  united  by  other 
ties  so  as  to  create  a  genuine  national  senti- 
ment. The  cardinal  defect  of  the  Austro- 
Hungarian  Government  has  been  its  failure 
to  create  such  ties  and  to  unite  by  any 
community  of  feeling  and  interest  the  various 
peoples  of  the  Empire. 

The  principle  of  nationality  is  that  the 
frontiers  and  policies  of  States  shall  be  so 
regulated  as  to  satisfy  these  claims.  It 
implies  that  a  population  united  in  this  way 
by  national  sentiment  shall  either  form  an 
independent  sovereign  State  or  shall  compose 
an  autonomous,  self-governing  community 
within  the  State.  Whether  the  national 
aspirations  of  a  people  can  best  be  satisfied 


INDEPENDENCE   AND   AUTONOMY  63 

by  complete  sovereignty  or  by  local  self- 
government  depends  upon  a  variety  of  fac- 
tors, the  numbers  of  the  population,  the 
geographical  nature  and  position  of  the 
territory  they  occupy,  their  political  and 
economic  relations  with  neighbouring  States. 
Denmark,  for  instance,  though  relatively 
insignificant  in  area  and  population,  is  marked 
out  geographically  as  well  as  by  its  history 
for  complete  independence  ;  while  Finland 
under  the  old  constitution,  which  we  may 
hope  will  be  restored  at  the  end  of  the  present 
war,  presented  an  example  of  a  people  enjoy- 
ing complete  freedom  of  national  develop- 
ment, though  the  geographical  position  of  the 
territory  which  they  occupied  brought  them 
almost  inevitably  within  the  boundaries  of  a 
larger  State. 

There  is  nothing,  therefore,  in  the  national 
idea  which  precludes  the  existence  of  Empires 
— the  association  of  a  number  of  self-govern- 
ing communities  in  an  over-State,  under  the 
leadership  of  the  most  populous  and  important. 
It  requires  only  that  the  association  should 
be  voluntary,  and  that  the  self-government 
of  the  separate  communities  should  be  com- 
plete. The  British  Empire  of  to-day  presents 
an  example  of  such  an  association,  based  on 


64  THE   PRINCIPLES   OF   THE   SETTLEMENT 

the  free  consent  of  self-governing  communi- 
ties, while  the  Austro-Hungarian  Empire  is 
the  typical  example  of  one  which  is  based  on 
force  and  domination  of  the  smaller  nation- 
alities by  the  more  powerful. 

The  idea  of  nationality  is,  of  course,  based 
on  the  first  principle  of  democracy,  that  the 
essential  condition  of  all  legitimate  govern- 
ment is  the  consent  of  the  governed.  Its 
general  observance  has  become  an  essential 
condition  of  European  peace.  If  the  principle 
is  denied,  we  must  admit  the  right  of  a  State 
to  conquer  and  hold  in  subjection  by  sheer 
force  provinces  inhabited  by  men  of  an  alien 
nationality.  This,  in  the  first  place,  involves 
the  creation  of  centres  of  unrest  and  the  out- 
break of  internal  strife,  by  which  neighbouring 
States,  especially  if  they  are  akin  to  the 
subject  populations,  are  liable  to  be  affected. 
In  the  second  place  a  government  which 
denies  the  principle  of  nationality  is  compelled 
to  base  its  rule  on  force  and  becomes  neces- 
sarily more  and  more  militarist  in  its  whole 
policy.  From  these  causes  it  follows  that  a 
political  arrangement  of  frontiers  which  dis- 
regards the  national  principle  cannot  be 
permanent  ;  and  that,  therefore,  no  lasting 
understanding  or  alliance  between  the  States 


DANGERS   OF   DISREGARDING   NATIONALITY  65 

composing  the  European  system  is  possible  ; 
both  because  the  status  quo  is  at  any  time 
liable  to  be  upset  by  the  explosion  of  internal 
unrest,  and  because  of  the  latent  conflict 
which  is  necessarily  set  up  between  States 
based  on  the  principle  of  domination  and 
those  of  the  same  nationality  as  their  own 
subject  races.  The  treaties  by  which  the 
decisions  of  the  Congress  of  Vienna  were 
confirmed  failed  to  secure  permanent  peace 
because  they  disregarded  this  principle  and 
thus  constituted  an  artificial  bar  to  the 
irrepressible  tendencies  of  natural  develop- 
ment. If  the  settlement  at  the  end  of  this 
war  is  to  have  any  better  fortune,  it  must 
be  founded  upon  a  sounder  statecraft. 

It  is  important  to  keep  in  mind  that  the 
application  of  the  theory  of  nationality  does 
not  necessarily  involve  the  creation  of  a  great 
number  of  small  independent  States,  which 
might  form  a  source  of  weakness  rather 
than  of  strength,  by  presenting  a  tempting 
bait  to  any  great  Power  whose  government 
was  still  imbued  with  the  old  theory  of 
conquest.  The  national  aspirations  of 
peoples  at  present  subject  to  alien  domination 
would  in  many  cases  be  satisfied  by  unit- 
ing them  with"  kindred  independent  States 


66  THE   PRINCIPLES   OF   THE   SETTLEMENT 

which  already  exist.  Wherever  possible  this 
course  would  present  a  double  advantage. 
It  would  strengthen  the  existing  States ; 
and  by  removing  the  outstanding  problem 
of  their  foreign  policy,  it  would  enable  them 
to  give  more  attention  to  internal  affairs, 
the  improvement  of  administration  and  the 
development  of  their  resources.  It  is  impor- 
tant also  to  remember  that  an  alternative 
solution  may  be  found  in  the  resolution  of  a 
military  empire  held  together  by  sheer  force 
into  a  federal  union  of  autonomous  states, 
united  economically  by  a  Zollverein  and 
politically  by  a  central  government  dealing 
with  joint  affairs  in  the  general  interest — its 
conversion,  that  is  to  say,  from  the  Austrian 
to  the  British  type. 

The  independence  of  the  smaller  States 
may  perhaps  be  secured  by  a  collective 
guarantee  of  the  Great  Powers.  The  ex- 
pedient is  one  which  has  been  tried  in  the 
past  and  has  proved  worthless  ;  as  in  the 
case  of  the  Duchy  of  Cracow.  It  is  open 
also  to  the  disadvantage  that  in  the  event 
of  any  State  violating  the  treaty  and  the 
guarantors  acting  up  to  their  engagements, 
it  becomes  impossible  to  localise  the  conflict. 
On   the   other   hand,    short   of   a   federated 


THE   VALUE   AND    LIMITATIONS   OF   GUARANTEES     67 

Europe  with  a  police  force  greater  than  the 
armaments  of  any  individual  Power,  which 
is  hardly  within  the  present  scope  of  practical 
politics,  it  offers  the  best  security  for  the 
independence  of  small  States,  the  best  means 
of  giving  expression  to  the  idea  of  public 
right  and  international  law.  The  greater  the 
number  of  guarantors  the  greater  will  be  the 
deterrent  to  aggression  and  the  greater  the 
security  for  peace.  It  is  obvious,  however, 
that  to  enable  such  guarantee  to  be  effective 
the  State  which  it  protects  must  be  founded 
on  a  natural  basis.  If  the  arrangement  is  an 
artificial  one  based  only  on  temporary  ex- 
pediency, the  guarantee  will  be  robbed  of  its 
moral  sanction,  and  will  not  be  effectively 
supported.  We  may  hope  that  one  result 
of  the  present  war  will  be  a  greater  respect 
for  guarantees  ;  but  if  this  is  to  be  so,  the 
territorial  arrangements  to  be  protected  must 
be  framed  on  national  lines.  We  shall  have 
to  consider  in  a  later  chapter  the  possibility 
of  extending  the  system  to  include  a  mutual 
guarantee  against  aggression  by  all  the  Powers. 
It  will  be  sufficient  to  say  here  that  this 
idea  can  only  be  rendered  possible  by  an 
equitable  settlement  which  shall  so  far  as 
possible  remove  causes  of  future  conflict, 


68  THE   PRINCIPLES   OF   THE   SETTLEMENT 

The  attitude  which  we  adopt  to  these  and 
other  suggestions  for  securing  European  peace 
will  depend  very  largely  upon  our  general 
conception  of  the  relations  of  one  nation  to 
another.  It  is  clear  that  if  we  regard  nations 
as  rival  units,  so  that  the  prosperity  of  one 
nation  or  group  of  nations  can  only  be  pro- 
moted at  the  expense  of  others,  no  permanent 
settlement  is  possible.  The  alleged  economic 
rivalry  of  nations  can  best  be  dealt  with  in  a 
later  chapter,  in  connection  with  the  economic 
problems  of  the  settlement.  It  is  sufficient 
for  the  moment  to  say  that  while  there  is  a 
good  deal  of  dispute  as  to  the  extent  to 
which  the  victor  can  compensate  himself  for 
his  losses  by  the  exaction  of  indemnities  and 
by  capturing  enemy  trade,  there  is  a  very 
general  agreement  that  no  profit  of  this 
nature  is  sufficiently  large  or  sufficiently 
certain  to  be  worth  the  risk  of  war  ;  and 
there  has  been  a  remarkable  disclaimer  since 
the  outbreak  of  the  present  conflict,  of  the 
idea  that  nations  would  to-day  go  to  war 
to  obtain  these  ends. 

There  remains  the  conflict  of  national 
cultures.  The  supposition  that  a  nation  can 
best  promote  its  own  culture  or  express  its 
national  consciousness  by  imposing  that  cul- 


THE  FAILURE  OF  FORCE  TO  COMPEL  RESPECT   69 

ture  upon  others  is  bound  up  with  the  theory 
of  domination  which  we  have  seen  to  work  so 
disastrously.  Moreover,  the  indignation  and 
disgust  which  German  methods  have  excited 
not  only  amongst  ourselves  but  in  neutral 
countries  suggest  very  forcibly  that  it  is  not 
by  military  aggression  that  national  culture 
can  make  itself  respected.  A  world  which 
has  been  thrilled  by  the  heroism  of  Belgium 
will  not  readily  acquiesce  in  a  theory  which 
associates  national  virtue  and  greatness  either 
with  extent  of  territory  or  with  military 
power.  We  believe  to-day  that  the  splendid 
courage  of  our  soldiers  and  our  Allies  will  be 
crowned  by  history  with  a  more  lasting 
fame  than  even  the  devotion  of  the  German 
masses.  We  believe  that  the  sacrifices  we 
are  making  in  this  war  will  add  to  the  respect 
in  which  our  nation  is  held.  If  we  analyse 
our  reasons  for  this  belief,  we  shall  find  that 
it  is  precisely  because  the  valour  of  our 
fighting  men  is  exercised  on  behalf  of  some- 
thing which  we  rank  still  higher  than  military 
fame  or  the  glory  of  conquest.  We  are  not 
seeking  to  make  our  national  culture  respected 
by  imposing  it  upon  others  ;  we  have  not 
resorted  to  force  in  furtherance  of  our  own 
policy.     We  are  fighting,  so  we  believe,  to 


70  THE   PRINCIPLES   OF   THE   SETTLEMENT 

restrain  the  attempt  made  by  a  military 
caste  to  impose  a  reign  of  force  upon  Europe  ; 
to  secure  the  quiet  enjoyment  of  national 
life  by  ourselves,  by  our  Allies,  and  by  the 
nations  of  Europe  as  a  whole.  Our  quarrel 
with  the  governments  of  Germany  and 
Austria  is  not  that  they  will  not  adopt  our 
form  of  civilisation,  but  that  they  threaten 
the  civilisation  of  others.  We  are  fighting, 
in  Mr.  Balfour's  words,  "  for  the  cause  of  all 
small  States,  for  the  cause  of  all  those  coun- 
tries which  desire  to  develop  their  own 
civilisation  in  their  own  way,  following  their 
own  ideals,  and  without  interference  from 
any  insolent  and  unauthorised  aggressor."  ' 
If  this  is  so,  if  these  are  the  objects  for  which 
we  are  fighting  and  the  principles  by  which 
we  shall  be  guided  in  the  settlement,  we  may 
surely  regard  as  at  least  a  working  hypothesis 
the  idea  that  nations  are  members  of  a 
community,  the  prosperity  of  each  depending 
at  once  upon  security  for  its  own  internal  de- 
velopment, economic,  intellectual,  and  moral, 
and  upon  co-operation  to  this  end  with  the 
other  members.  It  depends  upon  our  adop- 
tion or  rejection  of  this  hypothesis  whether 

1  Speech  at   Guildhall  Banquet:    Times,  November  10, 
1914- 


JUSTICE  AND  EXPEDIENCY  IN  THE  SETTLEMENT      71 

we  regard  war  or  peace  as  the  normal  relation 
of  States,  and  consequently  whether  our 
main  object  is  to  strengthen  our  hands  for 
future  wars  or  to  secure  ourselves  against 
their  breaking  out. 

If  we  accept  the  former  view  it  is  obvious 
that  justice  and  expediency  will  not  neces- 
sarily coincide.  I f  we  regard  military  strength 
as  the  sole  criterion  of  national  greatness 
and  as  in  itself  conferring  the  right  to  domin- 
ate weaker  Powers,  it  becomes  absurd  to 
talk  about  international  law  or  morality. 
In  the  rectification  of  frontiers,  etc.,  we  shall 
be  obliged  to  have  regard  rather  to  considera- 
tions of  strategy  than  to  strict  equity  or  the 
principle  of  nationality.  If  we  adopt  the 
latter  view,  we  shall  find,  broadly,  that 
justice  and  expediency  point  in  the  same 
direction,  since  the  peace  for  which  we  are 
working  can  only  be  secured  by  a  settlement 
which  is  natural  and  therefore  just.  We 
shall  seek  the  advantage  of  military  victory 
not  in  upsetting  the  balance  of  justice,  but 
in  giving  effect  to  the  policy  dictated  by 
justice.  It  will  become  more  important  to 
settle  disputed  questions  which  involve  a  risk 
of  war  than  to  acquire  positions  which  may 
give  an  advantage  in  war.     It  may  be  neces- 


72  THE   PRINCIPLES   OF   THE   SETTLEMENT 

sary  to  exact  certain  pledges  which  will 
secure  us  against  a  renewal  of  the  conflict 
before  the  principles  of  the  settlement  have 
had  time  to  take  root  ;  but  since  these 
measures  can  never  of  themselves  secure 
permanent  peace,  we  shall  regard  as  of 
primary  importance  such  steps  as  clear  away 
possible  sources  of  conflict  and  pave  the 
way  to  a  European  entente. 

It  may  be  remarked  in  passing  that  the 
strategical  rectification  of  frontiers,  where 
it  does  not  involve  the  transfer  of  any  con- 
siderable territory,  but  is  merely  a  question 
of  isolated  fortresses  or  of  positions  exercising 
a  strategic  command,  does  not  involve  the 
principle  of  nationality  to  any  great  extent. 
Where  political  boundaries  stop  just  short  of 
a  natural  frontier — a  river,  a  range  of  moun- 
tains, or  any  strongly  marked  natural  feature 
— it  may  be  desirable  that  they  should  be 
modified  in  the  direction  of  geographical 
completeness,  even  at  the  expense  of  some 
small  transfer  of  population.  If  an  existing 
frontier  gives  disproportionate  facilities'  for 
aggression  to  one  of  two  States  it  may  be 
well  that  it  should  be  rectified.  Beyond  this 
it  is  not  necessarily  desirable  to  go.  The 
dangers  and  disadvantages  incurred  in  the 


THE    RELATIONS   OF   STRATEGY   AND    POLICY     73 

transfer  of  considerable  populations  to  alien 
rule  outweigh  altogether  any  strategic  advan- 
tage which  can  be  obtained.  Even  the 
advantages  to  be  obtained  by  the  acquisition 
of  isolated  strategic  points  are  liable  to  be 
offset  by  an  increase  of  armaments  and  of 
fortification  on  the  part  of  the  State  from 
which  they  are  taken.  And  if  they  cannot 
be  geographically  incorporated  in  the  terri- 
tories of  the  Power  acquiring  them,  they  will 
necessitate  an  increase  of  armaments  on  its 
part,  in  order  to  maintain  them,  altogether 
out  of  proportion  to  their  intrinsic  value. 
In  the  case  of  strategical  positions  which  are 
valuable  mainly  for  offensive  purposes,  or 
which,  in  the  hands  of  their  present  possessor, 
appear  to  constitute  a  menace  to  the  peace 
of  the  world,  it  may  sometimes  be  possible 
to  provide  for  their  neutralisation.  The 
general  principle  of  neutralising  important 
centres  of  world-traffic  is  deserving  of  the 
most  careful  consideration  and  may  receive 
some  extension  in  practice  at  the  end  of  the 
war  ;  but  it  will  obviously  be  necessary  in 
each  case  to  weigh  very  carefully  the  interests 
of  all  parties  concerned,  not  least  of  which  are 
the  necessities  of  our  own  position  as  a  sea- 
Power.     The  treatment  of  all  these  questions 


74  THE   PRINCIPLES   OF   THE   SETTLEMENT 

of  strategic  points  must  represent  something 
of  a  compromise  between  purely  strategic 
interests  and  the  still  higher  considerations 
of  future  policy  and  the  possibility  of  a  wider 
understanding  between  nations. 

If  the  idea  of  a  European  entente  or  al- 
liance, to  which  reference  has  several  times 
been  made,  is  to  be  realised,  or  even  advanced, 
it  will  be  necessary  that  the  settlement 
should,  so  far  as  possible,  be  European. 
Discussion  of  the  terms  of  peace  in  the  Press 
and  elsewhere  shows  a  considerable  difference 
of  opinion  as  to  how  far  the  settlement  should 
include  any  questions  not  arising  directly 
out  of  the  war  and  as  to  whether  any  nations 
other  than  the  actual  belligerents  ought  to  be 
allowed  a  voice  in  it.  If  we  regard  the  war 
simply  as  a  trial  of  strength  between  two 
groups  of  Powers — whether  we  call  it  a 
conflict  of  cultures  or  an  expression  of  the 
law  of  struggle  between  nations — then  ob- 
viously these  terms  are  no  one's  business 
but  the  victors'.  In  that  case,  however,  we 
must  abandon  any  hope  of  securing  per- 
manent peace.  If,  on  the  other  hand,  we 
regard  it  as  a  struggle  between  the  spirit  of 
freedom  and  co-operation  and  that  of  domina- 
tion and  aggression,  we  shall  look  upon  the 


SHALL   THE    SETTLEMENT   BE   EUROPEAN  ?        75 

end  of  the  war  as  an  opportunity  to  establish 
European  society  upon  a  sounder  basis.  If 
that  be  so,  the  wider  the  scope  of  the  settle- 
ment and  the  greater  the  number  of  States 
taking  part  in  it,  the  better.  There  are,  no 
doubt,  practical  difficulties  in  the  way  of  deal- 
ing with  questions  not  actually  raised  by  the 
war.  Yet  if  we  hold  to  the  larger  conception 
of  the  struggle,  it  will  be  to  our  advantage  so 
far  as  possible  to  deal  with  all  outstanding 
problems  which  involve  the  principles  for 
which  we  are  fighting. 

The  view  that  the  settlement  should  be 
European  is  further  supported  by  the  fact 
that  neutral  countries  are  in  fact  suffering 
very  heavily  through  the  war.  To  some 
extent  this  has  always  been  the  case  ;  but 
there  can  be  little  doubt  that  the  complex 
interdependence  of  modern  life  has  tended 
to  accentuate  the  sufferings  of  neutral  peoples. 
In  just  the  same  way  the  countries  now 
belligerent  would  sutler  in  any  war  in  which 
they  were  neutral.  To  a  greater  extent  than 
ever  before,  each  nation  of  the  civilised  world 
has  come  to  depend  for  the  uninterrupted 
development  of  its  own  social  and  com- 
mercial life  not  only  upon  peace  with  other 
civilised  countries,  but  also  on  peace  between 


76  THE   PRINCIPLES   OF   THE   SETTLEMENT 

those  other  countries.  If,  therefore,  a  chance 
presents  itself  at  the  close  of  the  present 
war  to  call  together  all  the  European  nations 
in  a  conference  for  the  discussion  of  all  out- 
standing difnculties  in  the  relations  of  the 
European  peoples,  it  would  seem  that  we 
should  be  wise  to  take  advantage  of  it.  It 
is  said  to  be  unfair  that  those  countries 
which  have  not  shared  with  us  the  burden 
of  the  strife  should  share  in  the  benefits 
of  the  settlement.  Apart  from  all  questions 
of  justice  and  morality,  this  crudely  selfish 
point  of  view  does  not  truly  represent  the 
facts  of  the  case.  The  maintenance  of  Euro- 
pean peace  is  a  common  interest  of  all  the 
nations  ;  and  in  so  far  as  the  settlement  of 
disputed  questions  in  which  neutral  Powers 
are  involved  tends  to  the  preservation  of 
peace,  it  is  to  our  advantage  that  they  should 
be  dealt  with.  In  some  cases  it  will  be 
very  much  easier,  from  the  point  of  view 
of  practical  politics,  to  deal  with  these 
questions,  if  the  countries  concerned  do  take 
up  arms  upon  our  side.  But  as  a  general 
principle  it  would  probably  be  wise,  even 
on  the  narrowest  considerations  of  national 
interest,  to  make  the  settlement  as  wide- 
embracing  as  possible. 


THE    POSITION   OF   GERMANY  77 

We  must  not  forget,  moreover,  that  what- 
ever be  the  upshot  of  the  war,  Germany  will 
still  retain  her  place  in  the  European  system. 
We  have  seen  how  impossible  it  is  that  even 
her   military   power   should   permanently   be 
crushed  by  defeat.     She  will  retain  her  great 
and  homogeneous  population,  her  high  birth- 
rate, the  genius  for  hard  work  and  education 
by  which  she  has  become  great.     It  is  im- 
possible  to   forecast   the   effect   of   the   war 
upon  her  political  life.     We  may  hope  that 
the  failure  of  the  policy  of  aggression  into 
which   she  has  been   dragged,  will  discredit 
the    doctrines    of    her    militarist    class    and 
strengthen  the  hands  of  the  more  progressive 
parties  against  whom  it  has  with  difficulty 
held  its  own.     It  will  certainly  be  for  the 
advantage   of   Europe   that    this   should   be 
so,  and  that  the  policy  of  the  Allies  should 
encourage    any    such    tendency.     A    victory 
for    Germany    which    would     enhance    the 
prestige   of    the    Prussian   militarists   would 
be  fatal   to  European  peace.     It   might  be 
equally  fatal  if  the  Allies,  being  victorious, 
should  go  back   on   their   declarations,   and 
by  adopting  the  Prussian  policy  of  conquest, 
or    by    a    rash    interference    with    German 
internal  affairs,  enable  the  Junkers  to  hold 
7 


78  THE   PRINCIPLES   0E  THE    SETTLEMENT 

themselves  out  as  the  natural  leaders  of  a 
German  revanche.  It  is  not  likely  that 
there  will  be  any  sentimental  weakness 
towards  Germany  on  the  part  of  the  Allies. 
On  the  other  hand  we  must  see  to  it  that 
we  do  not  throw  away,  for  the  gratification 
of  any  sentiment  of  revenge  or  triumph,  the 
wider  and  deeper  interests  which  we  have 
at  heart. 

These  interests  embrace  nothing  less  than 
"  the  vindication  of  public  right  "  in  Europe, 
to  use  the  words  of  Mr.  Asquith,  "  the  saving 
of  European  civilisation ' '  in  the  phrase  of 
M.  Cambon.  If  that  civilisation  is  to  be 
secured  against  a  recurrence  of  this  catas- 
trophe, if  public  right  is  to  be  fully  vindicated, 
it  must  receive  expression  in  some  form  of 
European  organisation,  whether  it  take  the 
shape  of  a  European  Confederation,  the 
establishment  of  the  "  United  States  of 
Europe,"  or  simply  an  extension  of  existing 
alliances  and  ententes  to  include  all  the 
greater  European  Powers,  with  a  mutual 
guarantee  against  aggression.  Such  a  guar- 
antee would  secure  the  Allies  against  the 
fear  of  a  war  of  revenge,  and  would  prevent 
the  militarists  of  Germany  from  working  on 
their  people  by  stimulating  a  fear  of  Russia. 


AN   ALLIANCE   OF   EUROPE  79 

This  idea  of  an  allied  or  federated  Europe 
has  often  been  brought  forward  in  the  past, 
but  has  generally  been  dismissed  as  impractic- 
able. It  was  impracticable  so  long  as  the 
political  system  of  Europe  was  based  upon 
an  artificial  arrangement  of  boundaries.  It 
could  have  little  value  so  long  as  the  old 
belief  in  a  policy  of  conquest  and  domination 
remained  unimpaired.  But  if  we  can  achieve 
a  peace  based  upon  the  principle  of  nationality 
and  the  equitable  settlement  of  vexed  ques- 
tions, if  we  can  keep  before  ourselves  the 
idea  of  public  right  to  vindicate  which  we 
are  fighting,  it  ought  to  be  possible  to  take 
some  step  in  this  direction.  The  nations  of 
Europe  have  a  common  interest  in  peace 
and  in  a  reduction  of  the  burdens  of  arma- 
ment competition.  Both  reason  and  experi- 
ence tell  us  that  so  long  as  Europe  is  divided 
into  rival  groups,  the  armament  competition 
will  go  on  and  peace  will  be  liable  to  be 
broken.  Common  interests  can  be  secured 
only  by  co-operation,  and  if  these  common 
interests  are  fully  realised,  co-operation  should 
be  possible.  We  may  be  accused  of  looking 
towards  a  Utopia.  But  the  Utopia  of  to-day 
is  the  practical  politics  of  to-morrow.  The 
abolition    of    the    slave    trade    was    long    a 


80  THE   PRINCIPLES   OF  THE   SETTLEMENT 

Utopian  dream,  yet  Castlereagh,  the  least 
visionary  of  statesmen,  brought  it  back  from 
the  Congress  of  Vienna.  Religious  tolera- 
tion, representative  government,  internal 
order  and  justice  would  all  at  one  time  or 
another  have  sounded  equally  Utopian  to  our 
ancestors.  No  one  of  these  reforms  came 
all  at  once,  nor  will  the  Peace  of  the  World. 
To  expect  it  to  be  born  full-grown  from  the 
chaos  of  to-day  might  justly  stamp  us  as 
visionaries.  But  like  them,  it  can  be  obtained 
if  practical  men  will  give  practical  effect  to 
the  steps  which  lead  up  to  it.  It  will  be  for 
us,  when  we  come  to  the  end  of  our  present 
struggle,  to  take  the  first  step. 


CHAPTER  IV 

THE  TERRITORIAL  PROBLEMS  OF  THE 
SETTLEMENT 

We  have  seen  that  the  immediate  causes  of 
the  war  must  be  sought  in  questions  of 
nationality  and  of  alien  domination.  We  have 
seen  also  how  large  a  part  these  questions 
have  played  in  creating  centres  of  European 
unrest  and  sources  of  friction  between  the 
various  States.  If  the  Allies  are  successful,  it 
is  certain  that  extensive  territorial  rearrange- 
ments will  be  demanded  ;  and  if  it  is  hoped 
to  arrive  at  any  real  settlement  of  international 
problems  which  will  contain  a  possibility  of 
permanence,  these  rearrangements  must  be 
at  once  somewhat  sweeping  in  character  and 
actuated  by  the  principles  of  a  farsighted  and 
unselfish  statesmanship. 

They  must  be  based  not  upon  the  crude 
right  of  conquest,  but  upon  the  best  interests 
of  the  populations  concerned  ;  upon  a  sincere 
attempt  to  re-unite  divided  peoples  and  to 

81 


82      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

create  healthy  and  vigorous  nations.  The 
errors  of  the  Congresses  of  Vienna  and  Berlin 
lay  in  perpetuating  an  artificial  arrangement 
of  frontiers  and  subordinating  the  vital  in- 
terests and  national  aspirations  of  the  peoples 
concerned  to  a  mechanical  balance  of  power 
or  the  dictates  of  uninspired  political  ex- 
pediency. These  errors  must  be  avoided  and 
reversed.  Yet  while  imagination  and  sym- 
pathy will  be  demanded  from  the  statesmen 
of  Europe,  they  may  need  all  the  firmness, 
all  the  coolness  of  judgment  which  they 
possess,  to  enable  them  to  resist  the  claims 
put  forward  by  unpractical  enthusiasts. 

Since  the  outbreak  of  the  war  there  has 
been  much  re-drawing  of  the  map  of  Europe 
on  the  part  of  amateur  politicians.  In  some 
quarters  this  fascinating  pastime  has  been 
carried  to  a  length  which  is  indeed  a  little 
ridiculous.  It  is  only  the  amateur  or  the 
visionary  who  ventures  to  dogmatise  confi- 
dently on  the  subject.  We  do  not  yet  know 
the  conditions  under  which  peace  will  be 
made.  The  extent  of  the  victory  which  we 
hope  will  be  achieved,  the  degree  of  exhaus- 
tion of  the  combatants,  the  disposition  of  the 
peoples  concerned,  the  attitude  of  neutrals, 
the  possible  belligerency  of  some  countries 


V77A 


Russians 
Pole? 


Latins 


J Rutheniang 
1  i  Czechs.Slovaksd  Wends 


Slovenes 
t, .'...,. .' Croats  ASerbs 
L^_-l  J  Bulgarians 

Lithuania/is 


Northern1 


►  Southern! 


{ 


■Slavs 


Ural-Altaic 


r-rm 

-■— 

\\  •  *  ', '. '. 

Italians 
Rumanians 

{Magyars 
Turks 

Albanians    1 — — I 

Greeks        1 1  iTTTTI 

Germans     I    .        I 


RACIAL    MAP   OF   CENTRAL    EUROPE. 
83 


84      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

at  present  neutral — these  are  all  unknown 
factors  of  the  situation  which  will  vitally 
affect  the  settlement. 

Even  if  these  could  be  determined  the 
actual  problems  would  remain  complex  and 
difficult.  It  is  easy  to  talk  of  the  principle  of 
nationality  as  applied  to  transfers  of  terri- 
tory— but  populations  are  not  always  homo- 
geneous. There  are  scattered  peoples,  pro- 
vinces with  large  minority  populations.  Re- 
ligious divisions  cut  athwart  racial  frontiers 
■ — and  in  Eastern  Europe  religious  animosity 
may  be  a  factor  of  the  first  importance. 
Peoples  of  kindred  race  are  divided  by  here- 
ditary enmity,  bridged  over,  it  may  be,  in 
recent  years,  by  mutual  resistance  to  the 
oppression  of  a  third  party.  All  these  factors 
need  to  be  taken  into  account,  and  it  requires 
first-hand  knowledge  to  deal  with  them  ade- 
quately. Moreover,  we  have  to  remember 
that  we  are  not  fighting  this  war  alone.  Our 
Allies  will  have  their  own  views  as  to  the 
settlement,  and  these — especially  in  this  matter 
of  the  re-drawing  of  boundaries — may  be  other 
than  our  own.  We  shall  use  our  influence 
doubtless  in  favour  of  the  course  which  seems 
to  us  to  be  the  best  ;  but  it  is  folly  to  over- 
look the  necessity  for  considering  the  desires 


THE  DANGERS  OF  DOGMATISM         ©5 

and  interests  of  those  who  equally  with  our- 
selves will  have  a  voice  in  the  matter.  It 
is  well  that  we  should  know  clearly  what  we 
wish  upon  every  point  ;  but  it  is  at  least 
prudent  to  realise  that  upon  some  of  them  we 
may  have  to  give  way.  It  is  certainly  not 
by  a  confident  dogmatism  that  we  shall  best 
make  our  wishes  respected. 

Further,  while  common  nationality  may  be 
the  essential  foundation  of  a  stable  and  pros- 
perous State,  geographical  and  economic 
factors  cannot  be  left  out  of  account.  To 
ignore  the  relation  of  a  coast  to  its  hinter- 
land or  to  sever  districts  united  by  every  tie 
of  economic  interest  may  condemn  a  whole 
people  to  impoverishment  and  decay,  in  seek- 
ing to  satisfy  the  national  claims  of  an  in- 
significant minority.  The  distribution  of  the 
peoples  of  Europe  is  the  result  of  centuries  of 
conquest  and  re-conquest,  of  emigration  and 
commercial  settlement,  and  to  set  up  a  claim 
to  national  rights  on  behalf  of  every  scattered 
colony  is  to  instal  a  mere  will-o'-the-wisp  as 
the  object  of  statesmanship.  To  claim  for  a 
nation  everything  that  it  possessed  at  the  time 
of  its  greatest  expansion  would  in  many  cases 
be  to  violate  existing  national  sentiment  in 
favour  of  an  historic  legend.     'We  have  to 


86      TERRITORIAL   PROBLEMS   OF   THE    SETTLEMENT 

deal  not  with  a  mere  outline  map  which  we 
can  colour  as  we  please,  but  with  the  very 
practical  and  complex  problems  presented  by 
a  Europe  which  is  the  result  of  centuries 
of  development,  and  these  problems  can  be 
solved  only  if  the  application  of  sound  general 
principles  is  accompanied  by  a  just  apprecia- 
tion of  the  bearing  of  existing  facts.  To 
formulate  these  principles  may  be  an  excellent 
occupation  for  the  theorist  and  the  philosopher; 
to  apply  them  is  the  task  of  the  practical 
man  of  affairs. 

It  is  absurd,  therefore,  to  pretend  that  we 
can  settle  offhand  all  the  difficult  and  com- 
plex questions  wThich  will  arise  at  the  peace. 
Yet  their  very  difficulty  and  complexity 
render  it  more  important  that  we  should  be 
familiar  with  the  facts  which  are  ascertain- 
able concerning  those  problems  most  likely 
to  arise  ;  and  that  we  should  form  some  idea 
of  the  general  bearing  upon  them  of  the  great 
principles  which  are  at  issue. 

As  regards  territorial  rearrangements,  the 
greater  number  of  questions  likely  to  arise 
affect  various  provinces  of  the  Austro-Hun- 
garian  Empire.  We  have  seen  already  how 
the  very  nature  and  composition  of  that 
Empire  has  made  it  a  menace  to  the  peace  of 


THE    PROBLEMS    OF   AUSTRIA-HUNGARY  8y 

Europe,  and  it  is  hardly  conceivable  that  it 
should  survive  the  war  in  its  original  shape. 
Even  were  the  Allies  unable  or  unwilling  to 
impose  terms  involving  its  dismemberment, 
it  is  doubtful  whether  it  could  resist  the 
operations  of  those  internal  forces  which  tend 
to  disruption. 

The  alternatives  which  have  for  a  long 
time  seemed  to  present  themselves  to  the 
Empire  were  dismemberment  or  federation. 
With  the  rise  of  national  consciousness 
amongst  the  various  populations  it  seemed 
certain,  under  the  existing  conditions,  that 
they  would  either  break  off  from  the  Empire 
as  independent  States  or  become  absorbed, 
sooner  or  later,  by  the  States  of  kindred 
nationality  which  lay  across  the  frontiers. 
The  only  method  of  keeping  the  Empire  to- 
gether and  the  only  chance  of  creating  a  real 
national  consciousness  would  have  been  its 
resolution  into  a  loose  confederation  of 
autonomous  States,  in  which  each  distinct 
nationality  received  self-government  for  its 
own  affairs,  while  an  impartial  central  govern- 
ment looked  after  the  common  interests.  As 
we  have  seen,  this  policy  had  to  some  degree 
been  attempted  by  the  Austrian  Government, 
and  a  strong  party,  which  included  the  mur- 


88      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

dered  Archduke,  favoured  its  extension.  But 
the  invincible  obstinacy  of  the  Magyars  and 
the  old  bad  traditions  of  Austrian  policy  stood 
in  the  way. 

It  is  doubtful  how  far  this  method  could  be 
applied  to-day.  There  has  not  been  time  for 
the  measures  actually  taken  by  the  Austrian 
Government  to  have  any  very  deep  effect. 
The  whole  structure  has  now  been  shaken  by 
the  war.  The  army,  which  was  the  one  real 
link  between  the  different  nationalities,  has 
been  demoralised  by  defeat.  After  allowing 
for  much  newspaper  exaggeration,  it  appears 
certain  that  the  stress  of  war  has  provoked  a 
dangerous  outbreak  of  recrimination  and  dis- 
affection among  the  members  of  the  Empire. 
The  operation  of  these  factors  will  have  pro- 
foundly modified  the  situation.  A  solution 
based  on  federal  autonomy  is  peculiarly 
dependent  upon  the  goodwill  and  co-opera- 
tion of  the  various  peoples.  It  is  not  one 
which  can  successfully  be  imposed  from  with- 
out, and  there  is  little  likelihood  that  it  would 
now  be  undertaken  from  within.  In  the  case 
of  the  provinces  inhabited  by  Poles,  Serbs,  or 
Roumanians  it  is  highly  improbable  that  it 
would  be  accepted  either  by  those  inhabitants 
or    by    Russia,    Serbia,    or    Roumania.     Its 


8g 


90      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

application,  even  if  possible,  must  at  best  be 
partial. 

The  great  argument  against  dismember- 
ment has  hitherto  been  the  fear  of  a  Slav 
hegemony.  It  has  been  feared  that  the  break- 
up of  Austria  would  dangerously  increase 
the  power  of  Russia,  either  by  the  actual 
incorporation  of  Austrian  territory  or  by  the 
ascendency  which  she  would  acquire  among 
the  smaller  Slav  States  created.  If  Europe  is 
to  be  guided  after  the  war  by  the  old  doctrines 
of  rivalry  and  domination,  this  consideration 
has  much  force.  But  it  is  precisely  these 
doctrines  which  have  involved  us  in  the  pre- 
sent catastrophe.  It  is  permissible  to  hope 
that  they  will  at  least  have  lost  some  of  their 
attraction,  and  looking  at  the  situation  in  the 
light  of  newer  conceptions,  it  would  seem  that 
with  the  disappearance  of  the  Slav  grievances, 
of  the  restrictions  arbitrarily  imposed  upon 
the  development  of  Slav  nationality,  the  Slav 
menace  will  disappear  also. 

The  position  of  Germany  is  different.  It 
presents  two  main  problems — Prussian  Poland 
and  Alsace-Lorraine.  The  remainder  of  the 
Empire,  despite  the  differences  between  the 
North  and  South  Germans,  is — roughly  speak- 
ing— racially  homogeneous  and  has  a  large 


THE   SCOPE    OF   THIS   CHAPTER  91 

measure  of  national  unity.  The  problems 
presented  by  these  two  cases  have  their  own 
difficulties,  but  they  do  not  vitally  affect  the 
existence  of  the  German  Empire. 

To  deal  fully  with  all  the  considerations, 
historical,  racial,  religious,  economic,  political, 
involved  in  the  various  territorial  problems 
which  may  come  up  for  settlement  would  re- 
quire volumes.  All  that  is  possible  here  is  to 
indicate  very  briefly  their  leading  features,  in 
such  a  way  that  we  may  see  how  they  are 
affected  by  the  principles  which  have  been 
discussed,  and  what  bearing  they  have  upon  the 
central  problem  of  securing  a  permanent 
European  peace. 

We  shall  avoid  so  far  as  possible  compli- 
cated statistics  or  the  discussion  of  historical 
and  ethnographical  niceties.  Indeed,  it  is 
quite  possible  by  too  close  a  study  of  these 
details  to  obscure  the  broad  outlines  of  the 
situation  and  its  possibilities,  with  which  only 
we  are  now  concerned.  The  shortest  treat- 
ment must  occupy  some  space  ;  but  we  have 
to  remember  that  an  obscure  squabble  of 
Balkan  policy  may,  under  present  conditions, 
plunge  all  Europe  into  war.  If  we  are  to 
secure  better  conditions,  to  make  possible  the 
Alliance  of  Europe,  we  must  now  or  in  the 


92      TERRITORIAL  PROBLEMS  OF  THE   SETTLEMENT 

near  future  find  some  way  of  settling  these 
questions,  and  we  dare  not  leave  the  least  of 
them  wholly  out  of  account. 

It  is  necessary  to  repeat  that  the  possibility 
of  effecting  an  all-round  settlement  depends 
upon  factors  which  are  yet  uncertain.     There 
are  certain    readjustments  which  the  Allies 
will  certainly  demand  as  a  condition  of  any 
peace  which  may  be  made  ;    there  are  other 
questions  which  are  only  likely  to  arise  if 
the  defeat  of  the  Germanic  Powers  is  over- 
whelming, or  if  the  Austrian  Empire  breaks 
up,  as  a  result  of  the  war,  from  sheer  lack  of 
cohesive  power.     If  we  are  to  be  prepared  to 
deal    adequately   with    any   situation   which 
may  arise,  the  only  way  is  to  acquaint  our- 
selves as  far  as  possible  with  the  elements  of 
all  these  problems,  bearing  in  mind  that  it  may 
not  be  possible  to  take  action  in  respect  of 
more  than  a  certain  number,  yet  remembering 
also  that  those  questions  with  which  we  are 
unable  to  deal  at  the  peace  will  remain  to  be 
solved  in  the  future.     The  same  principles 
which  guide  us  in  the  settlement  after  the  war 
will  remain  valid  in  respect  of  the  policy  which 
we  shall  urge  in  the  counsels  of  Europe  during 
the  period  of  reconstruction  which  must  ensue. 
We  may  begin  with  that  question  which  is 


THE   PROBLEM   OF   POLAND  93 

common  both  to  Germany  and  to  Austria — 
the  problem  of  Poland. 

Poland  until  1795  was  an  independent 
kingdom.  The  outlines  of  its  stormy  history 
are  tolerably  well  known.  Its  constitution 
was  excessively  loose  and  awkward ;  its  cen- 
tral government  weak  ;  its  nobles,  who  pos- 
sessed the  real  power,  turbulent  and  imprac- 
ticable. Its  history  is  one  of  perpetual  internal 
disturbances  and  foreign  wars.  There  can 
be  no  doubt  that  it  represented  something  of 
a  European  nuisance.  Yet  its  partial  parti- 
tion between  Prussia,  Russia,  and  Austria  in 
1772  has  been  generally  condemned  as  bare- 
faced brigandage.  Whatever  right  of  inter- 
vention the  anarchy  of  Poland  may  have 
given  to  its  neighbours,  it  could  not  justify 
this  wholesale  annexation  of  Polish  territory. 
It  was  in  keeping  with  the  whole  character 
of  Frederick  the  Great,  who  suggested  it  ; 
it  is  known  to  have  occasioned  the  bitterest 
remorse  to  Maria  Theresa. 

In  1793-5  a  national  movement  of  reform 
was  crushed  by  the  three  Powers,  the  final 
partition  took  place,  and  the  old  Kingdom 
of  Poland  was  extinguished.  Many  Poles 
entered  foreign  service  and  their  hopes  for  a 
revival  of  their  kingdom  were  centred  upon 

8 


94      TERRITORIAL  PROBLEMS   OF  THE   SETTLEMENT 

Napoleon,  who,  however,  did  no  more  than 
create  the  Duchy  of  Warsaw  with  his  ally, 
the  King  of  Saxony,  as  Grand-Duke.  This 
duchy  was  annexed  to  Russia  by  the  Congress 
of  Vienna,  which,  however,  left  the  district 
of  Cracow  independent,  under  the  protection 
of  a  joint  guarantee  by  Prussia,  Austria,  and 
Russia,  a  guarantee  which  did  not  prevent 
Austria  annexing  it  in  1846  with  Russian  and 
Prussian  consent.  It  is  to  be  noted  that  both 
Great  Britain  and  France  protested  fruitlessly 
against  this  annexation  as  a  breach  of  inter- 
national obligations. 

It  is  not  necessary  to  trace  in  detail  the 
history  of  the  Poles  under  alien  rule  ;  but  in 
order  to  understand  the  present  position  it  is 
important  to  keep  in  mind  that  in  all  three 
countries  they  have  had  to  struggle  hard  to 
preserve  their  nationality  and  that  they  have 
never  quite  abandoned  the  hope  of  reunion. 
Russian  Poland  under  Alexander  I  became  a 
separate  kingdom  under  the  Russian  Crown 
with  a  fairly  liberal  constitution,  but  sank  to 
the  position  of  a  mere  Russian  province  after 
an  unsuccessful  rising  in  1830.  Further  ris- 
ings in  1860-63  led  to  the  final  loss  of  Polish 
autonomy  and  the  adoption  of  a  repressive 
policy   of   Russification.     It  is   again  worth 


96      TERRITORIAL   PROBLEMS   OF   THE    SETTLEMENT 

noting  that  the  British  Government  in  1831 
protested  against  the  withdrawal  of  the  Polish 
Constitution,  on  the  ground  that  it  was  a 
breach  of  the  Treaty  of  Vienna,  and  that  a 
more  lenient  policy  would  reconcile  the  people 
to  Russian  rule.  The  policy  thus  advocated 
would  probably  have  been  the  wisest ;  but  it 
is  at  least  arguable  that  the  Poles  had  proved 
themselves  politically  incompetent  and  that 
the  Russian  Government  had  grounds  for  im- 
patience. The  whole  history  of  the  Poles 
under  Russian  rule  is  one  of  mutual  misunder- 
standing and  blundering.  Yet  there  is  a 
better  hope  of  final  understanding  between 
these  two  Slavonic  races  than  between  the 
Poles  and  their  German  rulers  in  the  Central 
European  Empires.  To-day  the  population 
of  Russian  Poland  numbers  about  nine  and 
a  half  millions,  of  whom  about  seven  and  a 
half  millions  are  Slavs  and  over  a  million 
and  a  quarter  Jews.  Its  industrial  develop- 
ment in  recent  years  has  been  very  great,  and 
the  bond  of  economic  interest  between  Poland 
and  the  Russian  Empire  has  become  strong 
enough  to  modify  the  attitude  of  both  parties. 
The  Austrian  Poles,  numbering  to-day  about 
five  millions,  are  concentrated  almost  en- 
tirely  in    the    province    of     Galicia,    where 


THE     POLES     IN     AUSTRIA    AND     PRUSSIA         97 

they  form,  roughly  speaking,  one-half  of 
the  population,  the  remainder  being  mostly 
Ruthenians,  a  race  allied  to  the  inhabitants 
of  South-Wcstern  Russia.  The  Austrian 
Poles  have,  during  recent  years,  been  in 
a  more  favourable  position  politically  than 
those  of  Russia  or  Prussia.  The  Austrian 
Government  has  bought  their  support  by 
giving  them  a  considerable  degree  of  autonomy 
and  by  favouring  them,  politically  and  edu- 
cationally, at  the  expense  of  their  Ruthenian 
neighbours.  Their  economic  development 
has,  however,  been  greatly  restricted.  On 
the  whole  they  have  been  the  most  contented 
section  of  the  divided  nation,  and  at  the  be- 
ginning of  the  war  they  showed  an  inclination 
to  respond  to  the  appeals  made  by  Austria. 
It  is  unlikely,  however,  that  any  measure  of 
autonomy  which  Austria  could  offer  would 
weigh  with  them  against  the  opportunity  of 
reviving  the  united  Polish  kingdom. 

The  Poles  of  Prussia,  who  number  some 
three  millions,  have  been  subject  to  a  very 
scientific  and  "  thorough  "  process  of  Prus- 
sianisation,  including  a  systematic  campaign 
against  the  use  of  the  Polish  language.  They 
form  the  majority  of  the  inhabitants  in  the 
province  of  Posen  (with  the  exception  of  cer- 


98      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

tain  western  districts),  in  Upper  Silesia,  in 
part  of  West  Prussia,  and  in  the  southern 
strip  of  East  Prussia.  Deprived  of  political 
power,  they  have  striven  to  acquire  economic 
strength.  Attempts  to  hinder  the  develop- 
ment of  Polish  industries  have  been  met  by 
a  boycott  of  German  goods.  The  expropria- 
tion of  the  great  Polish  landowners  has  re- 
sulted in  the  creation  of  a  solid  class  of  pea- 
sant proprietors.  German  colonists  have  been 
introduced  into  the  Polish  districts  ;  but  the 
result  has  been  rather  that  they  have  been 
assimilated  by  the  Poles  than  that  they  have 
Germanised  their  neighbours.  The  scientific 
and  cold-blooded  nature  of  the  Prussian 
propaganda,  no  less  than  its  heavy-handed- 
ness,  has  made  the  Prussians  better  hated 
than  either  of  the  other  alien  rulers  of  Poland. 
At  the  beginning  of  the  war  all  three 
nations  made  a  bid  for  Polish  support  with 
large  promises ;  but  that  which  seems  to 
have  appealed  most  to  the  Polish  imagination 
was  the  Russian  proclamation  promising  to 
re-unite  the  Polish  kingdom  under  the  Rus- 
sian Crown.  With  regard  to  this  there  are 
three  questions  to  ask.  Is  the  promise 
genuine  ?  Is  it  possible  ?  Is  it  desirable  ? 
That  it  is  genuine  both  the  Poles  and  the 


THE     RUSSIAN     PROCLAMATION  99 

Russian  liberals  believe  in  spite  of  all  past 
troubles.  It  is  believed  by  many  liberal 
Russians  that  the  reactionary  tendencies  of 
the  bureaucracy  have  been  largely  due  to 
German  influence.  They  believe  that  the 
present  war  will  bring  together  the  Tsar,  the 
peasants,  and  the  moderate  elements  of  the 
progressive  parties,  and  that  it  is  likely  to  be 
followed  by  a  policy  of  decentralisation  and 
local  autonomy.  This  policy,  in  fact,  offers 
the  only  possible  hope  of  solving  the  problems 
presented  by  the  enormous  extent  of  the 
Russian  Empire.  In  any  such  programme 
Polish  autonomy  would  form  a  necessary  part. 
Moreover,  a  united  and  contented  Poland 
would  at  once  remove  the  greatest  of  Russia's 
internal  problems  and  immensely  strengthen 
her  position  in  Europe.  On  the  other  hand, 
the  acquisition  of  some  eight  million  addi- 
tional Polish  subjects  unaccompanied  by  the 
grant  of  autonomy  would  enormously  increase 
the  difficulties  of  the  Russian  Government  and 
would  afford  a  fertile  field  for  German  and 
Austrian  intrigue.  There  is  no  reason  to 
doubt  the  Tsar's  personal  sincerity,  and  the 
interest  of  the  Russian  government  appears 
to  lie  in  the  keeping  of  their  promise. 

Is  it  then  feasible  ?    The  Russians  are  al- 


100      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

ready  in  occupation  of  a  large  part  of  Galicia. 
If  the  Germans  have  invaded  Russian  Poland 
the  Russians  are  thundering  at  the  gates  of 
Eastern  Prussia.  It  is  at  least  possible  that 
the  next  few  months  will  see  their  armies  in 
the  heart  of  Prussian  Poland.  It  is  certain 
that  the  Germans  will  not  relinquish  a  foot 
of  territory  without  a  struggle,  but  it  is  not 
likely  that  they  will  make  the  same  sacrifices 
to  retain  these  provinces  as  they  would  make 
for  the  retention  of  those  whose  inhabitants 
are  German  in  speech  and  birth. 

The  delimitation  of  a  frontier  would  be 
difficult,  since  districts  purely  Prussian  are 
divided  by  districts  mainly  Polish.  In  such 
a  case  as  this  it  is  useless  to  wrangle  over 
ancient  history.  A  district  which  has  been 
Prussian^ for  centuries,|which  is  to-day  Ger- 
man in  speech  and  sentiment,  cannot  be 
claimed  for  the  new  Poland  on  the  ground 
that  its  original  inhabitants  were  Slavs.  The 
Prussians  themselves  are  largely  of  Slavonic 
origin.  Northern  Germany  as  a  whole  ac- 
quired its  Teutonic  character  as  the  result  of 
conquest  and  assimilation ;  but  where  that 
assimilation  has  taken  place,  it  is  idle  to  go 
back  to  the  time  of  Charlemagne,  or  even  to  ' 
that  of  the  Teutonic  knights,  for  racial  boun- 


THE     BOUNDARIES    OF     POLAND  10 1 

daries.  It  is  existing  national  sentiment 
which  we  have  to  consider  to-day,  not  racial 
origins  which  have  been  modified  by  centuries 
of  history.  In  the  same  way,  it  cannot  be 
contended  that  Danzig  and  Konigsberg  are 
to-day  Polish  because  they  once  belonged  to 
Poland.  We  have  to  remember  that  Poland 
in  the  days  of  her  independence  was  not 
averse  from  conquest,  and  the  extreme  limits 
of  her  ancient  power  cannot  be  taken  as  her 
natural  boundaries.  Towns  and  districts 
which  have  been  for  centuries  identified  with 
German  history  and  which  are  to-day  purely 
German  in  character  cannot  be  taken  from 
Germany  without  creating  sources  of  unrest 
and  discord  exactly  similar  to  those  created 
by  German  aggression  in  the  past.  On  the 
other  hand,  the  introduction  of  German 
colonists  as  an  instrument  of  Prussianisation 
does  not  rob  essentially  Polish  districts  of 
their  national  character.  The  one  great  diffi- 
culty is  presented  by  a  narrow  slip  of  origin- 
ally Polish  territory  (in  West  Prussia)  which 
runs  up  to  the  Baltic  and  divides  East  Prussia 
from  the  remainder  of  the  Empire.  It  is  not 
to  be  expected  that  Germany  would  consent, 
save  in  the  last  extremity,  to  anything  ap- 
proaching dismemberment,  or  would  refrain 


102      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

from  endeavours  to  upset  any  such  arrange- 
ment if  it  were  carried  out.  On  the  other 
hand,  it  is  contended  that  geographical  and 
economic  considerations  suggest  that  the 
mouth  of  the  Vistula  should  be  in  the  posses- 
sion of  the  State  through  whose  territory  it 
runs,  and  that  free  access  to  the  sea  is  neces- 
sary for  the  prosperity  of  the  reconstituted 
Polish  kingdom.  This  argument  is  certainly 
a  strong  one,  but  the  political  difficulties  in- 
volved in  a  separation  of  East  Prussia  from 
the  rest  of  Germany  would  appear  to  be  de- 
cisive. Not  only  is  it  inconceivable  that 
Germany  would  submit  to  such  dismember- 
ment without  a  struggle  which  might  inde- 
finitely protract  the  war,  but  it  is  as  certain 
as  anything  in  foreign  policy  can  be,  that  it 
would  lead  to  a  renewal  of  war  in  the  future. 
A  compromise  might  perhaps  be  found  in 
leaving  Danzig  to  Germany,  but  providing 
for  the  free  navigation  of  the  Vistula  and 
a  bonded  railway  from  Danzig  to  the  Polish 
frontier. 

However  the  frontier  be  drawn,  there  will 
remain  racial  minorities  on  either  side  of  the 
frontier,  but  there  will  be  a  tendency  for 
emigration  either  way  to  effect  a  readjustment, 
and  in  any  case  we  have  to  remember  here,  as 


THE     PROSPECTS    OF    THE     NEW    POLAND      103 

elsewhere,  that  the  application  of  the  principle 
of  nationality  to  territorial  changes  must 
always  be  more  or  less  of  a  rough  and  ready 
character.  If  the  Allies  are  victorious  and 
if  the  claims  of  Polish  extremists  are  over- 
ridden by  the  statesmanship  of  the  Allied 
Governments  and  the  wisdom  of  the  more 
moderate  nationalists,  there  seems  to  be  no 
reason  why  the  Kingdom  of  Poland  should 
not  be  re-established  in  a  form  which  would 
satisfy  all  reasonable  aspirations  of  the  Poles, 
without  leaving  on  Germany  any  such  scars 
as  should  disturb  the  future  peace  of  Europe. 
Is  this  re-establishment  desirable  ?  If  we 
believe  in  the  value  of  national  development 
we  must  answer,  yes.  The  Poles  are  an 
ancient  race,  with  a  highly  developed  lan- 
guage, a  great  literature,  and  a  passionate 
patriotism.  Under  all  the  disadvantages  of 
their  present  condition  they  have  contributed 
largely  to  European  art  and  science,  and  the 
strongly  individual  character  of  their  civilisa- 
tion renders  it  the  more  valuable  in  a  world 
which  tends  too  easily  to  uniformity.  From 
the  point  of  view  of  European  culture  it  is 
eminently  desirable  that  they  should  be  "  free 
to  develop  their  own  civilisation  in  their  own 
way,  following  their  own  ideals."     It  is  equally 


104      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

desirable  in  the  interests  of  European  peace. 
There  is  no  pretence  that  any  section  of  the 
Poles  has  ever  really  acquiesced  in  foreign 
rule.  They  are  united  not  merely  by  race 
but  by  all  the  elements  of  nationality  ;  by 
speech,  by  sentiment,  by  common  traditions, 
by  an  historic  past.  There  can  be  no  hope  that 
they  will  ever  remain  fully  contented  with 
anything  short  of  political  reunion.  There  is 
every  sign  that  they  have  gained  greatly  in 
political  wisdom.  Their  political  leaders  to- 
day come  from  the  most  moderate  and  prac- 
tical of  their  parties.  The  spread  of  the  co- 
operative movement  by  which  they  have 
sought  economic  protection,  and  its  signal 
success  both  in  Austrian  and  Prussian  Poland, 
demonstrates  a  great  advance  in  practical 
capacity.  There  appears  to  be  no  reason 
why  a  re-united  Poland  should  not  form  a 
stable  and  useful  member  of  the  Russian 
Empire  and  of  the  European  community. 

We  assume  that  the  promise  of  autonomy 
under  the  Russian  Crown  will  be  kept.  In- 
deed, as  we  have  shown,  it  is  to  the  clear 
interest  of  the  Russian  Government  that  it 
should  be  kept.  In  these  circumstances,  it 
is  probable  that  Poland  would  be  more  hap- 
pily  situated,   both   economically   and  from 


GERMANY    AND    THE     POLISH     PROBLEM       105 

the  point  of  view  of  political  safety,  under 
this  form  of  association  with  Russia  than  as 
an  independent  buffer  State  between  Russia 
and  Germany.  So  far  as  can  be  ascertained, 
such  a  position  would  willingly  be  accepted 
by  the  Polish  people,  and  the  better  under- 
standing between  the  two  Slavonic  races 
which  should  result  must  be  to  the  advantage 
of  both.  Nor  will  Germany  really  suffer. 
The  final  solution  of  the  Polish  problem  should 
at  once  remove  one  of  the  chief  causes  of 
friction  between  Russia  and  Germany,  and 
be  of  good  omen  for  the  internal  progress  of 
Germany  itself.  The  sustained  and  fruitless 
efforts  to  break  down  the  nationality  of  the 
German  Poles  have  not  only  caused  untold 
suffering  to  the  Poles  themselves,  but  have 
had  a  large  share  in  imprinting  upon  the 
German  Government  its  militarist  and  abso- 
lutist character.  Domination  and  reaction 
go  hand  in  hand  ;  and  the  removal  of  the 
Polish  problem  should  accelerate  the  develop- 
ment of  German  liberties.  The  re-establish- 
ment of  the  Polish  kingdom  would  benefit 
not  merely  the  Poles  but  every  party  to  the 
partitions.  It  would  also  remove  finally  one 
of  the  most  deep-seated  causes  of  European 
unrest. 


106      TERRITORIAL  PROBLEMS  OF  THE   SETTLEMENT 

Ruthenes. — It  was  said  that  the  Austrian 
Poles  formed  only  about  half  of  the  popu- 
lation in  the  province  of  Galicia.  Of  the 
remainder,  some  42  per  cent,  consists  of 
Ruthenes,  who  form  also  40  per  cent,  of 
the  inhabitants  of  the  adjacent  province  of 
Bukovina.  The  Ruthenes  or  Ruthenians 
are  a  Slavonic  people  belonging  to  the 
Little  Russian  race,  a  branch  of  the  Russian 
nation  inhabiting  the  south-west  portion  of 
Russia — the  Ukraine.  Unlike  the  Poles,  the 
Ruthenes  have  received  very  little  considera- 
tion from  the  Austrian  Government.  Whereas 
some  five  millions  of  Poles  return  about 
eighty  members  to  the  Austrian  House  of 
Representatives  and  possess  two  universities 
and  ninety-three  gymnasia  or  higher  schools, 
the  three  and  a  half  million  Ruthenes  return 
only  about  thirty  members  and  possess  no 
university  and  only  ten  gymnasia.  The 
"Little  Russians"  are  a  somewhat  back- 
ward race,  and  it  seems  to  have  been  the 
policy  of  the  Austrian  Government  deliber- 
ately to  retard  their  development.  It 
has  certainly  been  a  part  of  that  policy  to 
encourage  dissension  between  them  and  the 
Poles. 

The  natural  fate  of  the  Ruthenes  would 


THE    RUTHENES  107 

appear  to  be  incorporation  in  the  Russian 
Empire  which  includes  the  mass  of  their 
countrymen.  It  is  certainly  the  solution 
which  will  be  looked  for  by  Russia,  who  has 
already  occupied  and  announced  her  annexa- 
tion of  the  Ruthenian  portion  of  Galicia.  It 
is  probable  that  such  annexation  will  be  dis- 
tinctly to  the  advantage  of  the  inhabitants. 
It  is  true  that  Russian  history  contains  the 
record  of  some  unhappy  blundering  in  the 
Ukraine.  The  Russian  Government  has  been 
too  much  guided  by  the  desire  to  impose  a 
homogeneous  character  upon  the  teeming 
millions  of  the  Empire,  and  has  been  prone 
to  ignore  the  special  individuality  of  the  Little 
Russian  people  and  to  discourage  the  use  of 
the  Ruthenian  dialect.  But  Russia  is  still  in 
process  of  development,  and  there  is  reason 
to  hope  that  if  she  succeeds  after  this  war  in 
solving  the  questions  which  have  most  agi- 
tated her  foreign  policy,  her  internal  develop- 
ment will  receive  fuller  attention  and  will 
proceed  on  sounder  lines.  The  wisest  of  her 
politicians,  as  already  mentioned,  are  looking 
to  decentralisation  and  local  autonomy  as  the 
best  method  of  administering  her  vast  Em- 
pire, and  the  best  chance  for  the  Ruthenes 
is  probably  to  share  these  hopes  with  their 


108      TERRITORIAL  PROBLEMS   OF  THE   SETTLEMENT 

kinsmen  across  the  border.  From  the  Aus- 
trian Government  they  have  nothing  to  hope, 
and  to  include  them  in  the  Kingdom  of  Poland 
would  be  fatal  to  any  prospect  of  their  develop- 
ment. 

If,  however,  Galacia  and  the  Ruthenian 
portion  of  Bukovina  are  incorporated  in  the 
Russian  Empire,  a  wise  statesmanship  will  be 
necessary  in  drawing  the  frontiers.  In  the 
main,  the  western  portion  of  Galicia  is  Polish 
and  the  eastern  portion  Ruthenian  ;  and  the 
line  of  the  resuscitated  Kingdom  of  Poland 
will  no  doubt  follow  this  division.  But  how- 
ever carefully  it  be  drawn,  scattered  minority 
populations  will  be  left  on  either  side  of  the 
border,  and  if  the  new  kingdom  and  the  new 
provinces  are  to  be  free  from  sources  of 
trouble,  an  equitable  and  sympathetic  ad- 
ministration will  be  necessary,  in  order  to 
secure  fair  treatment  for  these  minorities.  In 
Bukovina,  while  42  per  cent,  of  the  inhabi- 
tants are  Ruthenians,  some  32  per  cent,  are 
Roumanians  and  21  per  cent.  Germans,  with 
a  few  Poles  and  Magyars.  Of  the  Roumanians 
we  shall  have  to  speak  later  in  connection 
with  Transylvania.  But  here  again,  however 
the  boundary  is  drawn,  the  German  settle- 
ments,   which   cannot   be   united   with   any 


THE   CZECH   QUESTION  IO9 

German-speaking  neighbours,  and  the  scat- 
tered Poles  and  Magyars,  can  be  safeguarded 
only  by  good  government.  It  will  rest  with 
the  justice  and  impartiality  of  the  administra- 
tion to  render  them  a  source  of  strength  and 
not  of  weakness. 

The  Czechs. — To  the  south  and  west  of 
Poland  lie  the  provinces  of  Bohemia  and 
Moravia,  the  remains  of  the  old  Bohemian 
kingdom.  The  Czechs  or  Bohemians  form 
some  65  per  cent,  of  the  inhabitants  in 
Bohemia,  and  70  per  cent,  in  Moravia,  the  re- 
mainder being  Germans.  In  the  fifteenth 
century,  when  the  Crown  of  Bohemia  finally 
passed  by  marriage  to  the  House  of  Austria, 
the  Czech  nation  was  a  powerful  and  proud 
one.  Its  conversion  by  Huss  involved  it  in 
a  desperate  struggle  with  Austria,  which  was 
crushed  after  heroic  resistance  ;  but  for  some 
two  centuries  more  the  Czechs  maintained  a 
separate  national  life.  After  a  long  period 
in  which  they  seemed  to  be  crushed  out  as  a 
separate  people,  their  consciousness  was  re- 
awakened by  the  recrudescence  of  national 
feeling  in  the  early  nineteenth  century.  The 
national  language  and  literature  have  been 
sedulously   cultivated   and   the  dream   of   a 

9 


110      TERRITORIAL   PROBLEMS   OF   THE    SETTLEMENT 

Bohemian  kingdom  has  again  arisen.  Heavy 
German  immigration  has  led  to  the  formation 
of  large  German  colonies  in  the  two  pro- 
vinces, and  in  the  Parliament  of  the  Empire 
a  scheme  of  minority  representation  has  been 
devised  for  the  two  races.  In  some  cases  the 
older  German  families  have  thrown  in  their 
lot  with  the  Czechs  and  consider  themselves 
Bohemians  even  before  Austrians.  The  de- 
velopment of  Czech  power  politically  and 
economically  has  become  a  very  serious  pro- 
blem for  the  Austrian  Government.  It  is  less 
intimately  connected  with  the  present  war 
than  that  of  the  Poles  or  the  Ruthenes,  inas- 
much as  the  Czechs  have  no  large  body  of 
kinsmen  across  the  frontiers,  and  the  question 
may  arise  whether  it  should  be  dealt  with  in 
the  settlement. 

Inasmuch  as  no  one  of  the  Allies  has  any 
direct  interest  in  Bohemia  it  cannot  be  ex- 
pected that  they  will  make  the  solution  of 
this  problem  a  condition  for  which  they  are 
prepared  to  go  on  righting.  If,  however,  it  is 
possible  to  call  a  general  European  Confer- 
ence for  the  settlement  of  the  future,  it  may 
become  desirable  to  deal  with  this  as  well  as 
with  other  questions  likely  to  promote  internal 
or  external  unrest,     If  the  war  results  in  any 


THE  FUTURE  OF  BOHEMIA         III 

definite  collapse  of  the  Austrian  Empire  the 
question  may  even  become  acute.  It  appears, 
indeed,  that  the  Czech  question  is  being  raised 
energetically  at  the  present  time  and  that  a 
national  rising,  either  during  the  war  or  im- 
mediately after  its  termination,  may  force 
the  Powers  to  face  it  and  attempt  a  solution. 
In  that  case  two  alternatives  seem  to  offer 
themselves.  One  is  that  an  independent 
Kingdom  of  Bohemia  should  be  created  under 
the  guarantee  of  the  Powers  ;  the  other  that 
Bohemia  and  Moravia  should  remain  under 
the  Austrian  Crown  as  an  autonomous  king- 
dom, on  the  same  standing  as  the  new  King- 
dom of  Poland  in  the  Russian  Empire.  There 
is  no  possibility  in  this  case  of  any  clear  divi- 
sion between  the  two  races  which  inhabit  the 
provinces.  In  the  main  the  German  colonies 
form  a  ring  round  the  Czech  districts,  and  it 
might  be  possible  for  some  of  these  German 
districts  to  be  absorbed  by  Germany  and  by 
Austria.  But  in  the  north-east  this  would 
be  impossible,  and  generally  the  economic 
interests  of  the  two  races  are  too  closely 
bound  together  to  render  any  satisfactory 
partition  practicable.  Bohemia  and  Moravia 
form  an  integral  economic  and  geographical 
unit,  and  it  will  be  impossible  to  delimitate  the 


112      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

frontier  in  any  way  that  would  get  rid  of  a 
large  German  minority.  Whichever  solution 
is  adopted,  the  internal  progress  of  Bohemia 
will  depend  upon  securing  such  impartiality 
in  the  constitution  and  government  as  will 
bind  the  two  peoples  together  by  the  tie  of 
common  interests,  and  create  from  them  a 
united  Bohemian  nation.  In  either  case  the 
economic  strength  of  the  provinces  and  the 
energy  and  ability  of  the  people  should  secure 
their  future  prosperity. 

That  this  prosperity  would  be  promoted 
rather  by  autonomy  than  by  independence  is 
very  probable.  There  is  no  considerable 
Czech  population  over  the  borders  with  which 
the  provinces  could  be  united.  Bohemia — 
except  in  The  Winter's  Tale — is  without  sea- 
coast  ;  her  access  to  the  markets  of  Europe 
lies  across  land  frontiers  and  her  economic 
interests  might  be  best  consulted  by  autonomy 
within  some  larger  political  system  which 
would  give  her  the  advantages  of  inclusion 
within  a  Zollverein.  The  lot  of  a  small  inland 
State  is  not  always  a  happy  one,  and  provided 
complete  self-government  and  liberty  for  self- 
development  were  assured  to  her,  Bohemia 
might  lose  rather  than  gain  by  pursuing  the 
phantom  of  sovereignty. 


GREATER   SERBIA  113 

There  are,  of  course,  very  grave  difficulties 
in  the  way  of  attempting  to  impose  upon  any 
government  a  re-arrangement  of  its  internal 
affairs — such  as  the  granting  of  autonomy 
to  a  particular  province.  But  if,  as  seems 
not  unlikely,  the  Austrian  Empire  is  thrown 
into  the  melting-pot  by  the  combination  of 
internal  disturbance  with  military  defeat, 
there  will  be  ample  opportunity  to  press  any 
policy  which  seems  likely  to  aid  in  the  preser- 
vation of  European  order  and  security. 

It  should  be  mentioned  that  in  Northern 
Hungary  there  are  some  two  million  Slovaks, 
a  gifted  and  attractive  people  very  nearly 
related  to  the  Czechs,  who  might  very  pro- 
perly, so  far  as  the  districts  inhabited  by 
them  are  capable  of  delimitation,  follow  the 
fortunes  of  their  Czech  cousins.  They  have 
been  cruelly  oppressed  by  the  government  of 
Buda-Pesth,  and  it  is  certain  that  they  would 
welcome  the  opportunity  of  that  reunion  with 
Bohemia  which  natural  and  geographical  con- 
siderations alike  indicate. 

Greater  Serbia. — It  is  in  the  south,  how- 
ever,  that  the  problem  of  nationality  has 
become  most  acute  for  the  Austrian  Empire 
and  has  finally  dragged  Europe  into  war.     As 


114      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

we  have  seen,  the  strained  relations  between 
Austria  and  Serbia  have  sprung  from  the 
existence  within  the  Austrian  Empire  of  a 
great  Slav  population.  Broadly  speaking,  the 
position  is  as  follows :  In  Austria  proper  the 
seacoast  provinces  of  Dalmatia  and  the  Coast- 
land  contain  some  100,000  Serbs,  800,000 
Croats  (a  race  nearly  allied  to  the  Serbs),  and 
100,000  Slovenes,  also  a  kindred  race.  The 
inland  provinces  of  Carniola  and  Carinthia 
contain  1,200,000  Slovenes.  In  the  coast 
territory,  the  Italian  element  is  nearly  as 
large  as  the  Slav,  and  in  Carinthia  nearly  three- 
quarters  of  the  inhabitants  are  Germans  ; 
but  in  Carniola  the  Slovenes  preponderate  to 
the  extent  of  95  per  cent.  In  Dalmatia  the 
population  is  mainly  Serbo-Croat,  with  a 
small  Italian  minority.  When  we  turn  to 
Hungary  we  find  that  in  the  great  province 
of  Croatia-Slavonia  and  in  the  southern  dis- 
tricts of  Hungary  proper  there  are  over  a 
million  Serbs  and  nearly  two  million  Croats, 
as  well  as  100,000  Slovenes.  Further,  by  the 
annexation  of  Bosnia-Herzegovina,  the  Dual 
Monarchy  has  undertaken  the  administration 
of  850,000  Serbs  and  450,000  Croats  of  the 
Christian  religion,  besides  some  600,000  Serbo- 
Croat  Moslems. 


THE    SOUTHERN    SLAVS  115 

Among  Austrian  statesmen  there  was  a 
party,  headed  by  the  murdered  Archduke, 
which  had  conceived  the  idea  of  solving  the 
Slav  problem  by  uniting  the  Southern  Slavs 
into  an  autonomous  kingdom — thus  convert- 
ing the  Dual  into  a  Triple  system.  The 
Hungarian  Government  was  resolutely  op- 
posed to  any  such  concessions.  Whatever 
appearance  of  constitutional  government  they 
were  induced  by  Austria  to  accept  was  nega- 
tived by  corrupt  administration,  and  the  con- 
dition of  Croatia-Slavonia  had  been  growing 
steadily  worse.  The  effect  was  to  unite  the 
Croats  and  Serbs  in  resistance  to  their  op- 
pressors. Although  branches  of  the  same 
race  speaking  the  same  language  (though 
written  in  different  characters),  the  Croats 
and  Serbs  had  never  been  united  even  in  the 
days  of  Serbia's  greatness  in  the  fourteenth 
century.  While  Serbia  lay  prostrate  under 
the  Turkish  tyranny  the  Croats  were  united 
to  the  Austrian  Crown  by  tics  of  military  ser- 
vice and  were  among  the  most  ardent  sup- 
porters of  the  Imperial  greatness.  Moreover, 
the  Croats  were  Catholics  while  the  Serbs 
were  Orthodox,  and  religious  animosity  pre- 
vented any  real  union  between  them,  even  as 
fellow-subjects  of  Austria.      In  more  recent 


Il6      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

years  the  uninterrupted  tyranny  of  the 
Magyars,  the  abrogation  of  the  Croatio- 
Slavonian  Constitution,  and  the  determined 
refusal  of  the  Government  of  Buda-Pesth  to 
recognise  the  claims  of  the  Southern  Slavs 
to  national  existence,  to  the  official  use  of 
their  joint  language,  or  even  to  elementary 
justice,  have  caused  a  rapprochement  of  the 
two  races.  The  younger  elements  of  both 
rallied  round  the  programme  of  the  Serbo- 
Croat  Coalition.  Oppression  has  given  them 
community  of  interests  ;  the  differences  be- 
tween them  have  receded  and  the  idea  of 
common  nationality  has  made  progress.  Dur- 
ing the  last  decade  at  least,  Croats  and  Serbs 
have  worked  together  wholeheartedly  to 
secure  autonomy. 

Meanwhile  the  rise  of  Serbia  and  the  con- 
stant efforts  of  Austria  to  control  or  weaken 
her,  led  to  the  rise  of  a  Pan-Serbian  move- 
ment on  both  sides  of  the  border.  The  an- 
nexation of  Bosnia  and  Herzegovina  by 
Austria,  followed  by  the  Serbian  victories  in 
the  Balkan  War,  created  a  great  wave  of 
popular  enthusiasm  for  Serbian  nationality 
among  the  Serbs,  Croats,  and  even  Slovenes, 
in  both  the  Austrian  and  the  Hungarian 
provinces. 


THE  CLAIMS  OF  SERBIA  117 

The  problem  of  these  Southern  Slavs  needs 
firm  and  statesmanlike  handling  if  the  menace 
which  they  have  presented  to  the  peace  of 
Europe  is  to  be  removed.  It  is  certain  that 
the  Serbians  will  desire  to  see  their  kingdom 
expanded  westward  at  least  to  the  limits  of 
its  ancient  greatness.  And  even  this,  which 
would  give  them  Bosnia  and  Herzegovina, 
would  fail  to  satisfy  the  national  aspirations 
of  the  Serbian  race.  The  services  of  Serbia 
to  the  Allies  have  been  great.  She  has 
neutralised,  by  dogged  fighting  and  admir- 
able strategy,  a  very  large  Austro-Hungarian 
force,  and  if  we  are  to  follow  the  doctrines  of 
orthodox  statecraft,  she  may  justly  expect  a 
large  reward.  If  we  apply  the  principles  of 
nationality  and  consent  we  shall  find  that 
these  also  will  lead  us  to  the  creation  of  a 
Southern  Slav  State  which  would  add  to  the 
existing  Kingdom  of  Serbia  the  Southern 
Slav  districts  of  Austria-Hungary.  Inde- 
pendent Serbia  represents  national  traditions 
which  have  persisted  all  through  the  period 
of  Turkish  misrule  ;  she  is,  in  fact,  the  natural 
rallying  centre  for  the  kindred  races  in  the 
Dual  Monarchy.  It  is  not  a  question  of  en- 
larging her  borders  at  the  expense  of  alien 
populations.     It   is   fairly   certain   that   the 


Il8      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

union  would  be  welcomed  not  only  by  the 
Serbs  of  Austria-Hungary,  but  by  the  Croats 
and  even  by  the  Slovenes.  They  might,  in- 
deed, resent  the  dictatorship  of  Belgrade  or 
any  form  of  government  which  made  of  the 
Serbs  a  ruling  caste.  But  the  idea  of  a 
Southern  Slav  State  which  should  include  the 
three  closely  allied  races  on  equal  terms  is 
popular  with  all  alike.  "  Jugoslavia,"  the 
Kingdom  of  the  Southern  Slavs,  is  the  term 
by  which  Croats  and  Slovenes,  as  well  as 
Serbs,  express  their  hopes  for  the  future.  In 
such  a  union  the  King  of  Serbia  might  become 
king  also  of  the  Triune  Kingdom  of  Croatia- 
Slavonia-Dalmatia  and  the  Parliament  of 
Agram  would  deal  with  the  domestic  affairs 
of  the  Croatio-Serbian  provinces,  while  the 
Federal  Parliament  would  sit  probably  at 
Belgrade.  The  Slovene  districts  and  Bosnia- 
Herzegovina  would  retain  their  provincial 
Diets.  There  are  many  among  the  Croat 
and  Slovene  leaders  who  would  welcome  union 
with  Serbia  on  almost  any  terms,  believing 
that  when  once  unity  was  effected  they  could, 
without  difficulty,  arrange  with  the  Govern- 
ment of  Belgrade  for  such  measures  of  local 
self-government  as  they  desire. 

A  union  on  these  lines  would  protect  the 


JUGOSLAVIA  119 

local  customs  and  traditions  to  which  the 
people  are  strongly  attached,  yet  would  serve 
to  foster  and  strengthen  the  growing  con- 
sciousness of  national  unity  and  to  build  up 
a  genuine  national  culture.  It  would  give 
probably  the  best  possible  chance  for  the 
economic  and  moral  development  of  the  re- 
spective peoples,  while  Serbia,  as  the  pre- 
dominant partner  and  the  founder  of  Southern 
Slav  unity,  would  occupy  a  position  con- 
sonant with  the  aspirations  of  those  who  look 
back  proudly  and  regretfully  to  her  ancient 
greatness.  It  is  perfectly  true  that  the  record 
of  Serbia  is  very  far  from  impeccable.  We 
must  remember,  however,  that  she  has  had 
but  a  little  time  for  self-development  since  her 
emergence  from  the  long  period  of  crushing 
Turkish  misrule  ;  and  that  her  task  has  been 
complicated  by  the  difficulties  of  her  foreign 
policy.  With  a  population  expanded  to  some 
ten  or  twelve  millions,  freed  from  the  com- 
plications of  the  Slav  problem  in  her  relations 
with  Austria-Hungary,  and  provided  with  an 
outlet  to  the  sea,  she  would  at  once  be  able  to 
devote  herself  more  freely  to  internal  develop- 
ment and  would  be  able  to  pursue  that 
development  under  far  more  favourable  poli- 
tical and  economic  conditions.     While  it  is 


120      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

true  that  the  advocates  for  Serbia  have  often 
claimed  for  her  a  far  higher  plane  of  civilisa- 
tion than  she  has  yet  attained,  it  is  wholly 
unjust  to  condemn  her  shortcomings  without 
reference  to  the  obstacles  which  have  retarded 
her  development. 

The  maintenance  of  the  status  quo  can  hardly 
be  considered  in  the  event  of  an  Allied  vic- 
tory. It  would  leave  open  precisely  those 
questions  which  have  caused  the  war.  Even 
the  possibility  of  genuine  autonomy  within 
the  Empire  has  been  shattered.  Ten  years 
ago  it  might  have  been  acceptable  and  might 
have  gone  far  to  solve  the  internal  problems 
of  the  Austro-Hungarian  Government.  To- 
day it  would  be  acceptable  neither  to  Serbia 
nor  to  the  Slavs  within  the  Empire.  It  has 
been  suggested  that  an  independent  guaran- 
teed kingdom  might  be  created  out  of  the 
Slav  provinces.  It  is  doubtful,  however, 
whether  the  inhabitants  would  not  be  better 
off  as  part  of  a  Southern  Slav  kingdom  which 
would  be  of  sufficient  size  to  carry  weight 
and  sufficiently  homogeneous  for  the  creation 
of  a  true  nationality.  Such  a  solution,  where 
an  independent  national  nucleus  exists,  would 
seem  to  present  less  difficulties  and  to  offer  a 
greater  chance  of  permanence  than  the  creation 


SOME   BOUNDARY   QUESTIONS  121 

of  small  and  weak  neutralised  States.  The 
Jugoslavia  hinted  at  would  be  strong  enough 
to  be  respected,  and  there  seems  no  reason 
to  fear  that  it  would  become  a  mere  puppet 
of  Russia.  On  the  other  hand,  there  is  every 
reason  to  believe  that  Russia  would  welcome 
the  establishment  of  a  vigorous  Slav  State  in 
Southern  Europe,  strong  and  spirited  enough 
to  preserve  itself  from  Austrian  intrigue. 

Here,  again,  the  task  of  drawing  the  boun- 
daries is  a  difficult  one.  In  Croatia-Slavonia 
and  some  of  the  southern  counties  of  Hungary 
there  is  no  large  minority  population  to  create 
trouble.  It  appears  that  the  Croats  and 
Serbs  do,  to-day,  genuinely  desire  union,  and 
the  two  races  are  so  nearly  akin  that  it  should 
be  possible  for  capable  statesmanship  to  weld 
them  into  a  nation.  The  one  great  obstacle 
to  unity — difference  of  faith — has  been  re- 
moved by  the  Concordat  effected  by  Serbia 
with  the  Vatican,  by  which  religious  equality, 
as  between  Orthodox  and  Catholics,  has  been 
assured  to  all  Serbian  subjects.  In  Bosnia- 
Herzegovina  the  problem  is  complicated  by 
the  presence  of  a  considerable  Moslem 
minority  ;  and  it  may  be  noted  that  under 
Austrian  rule,  representation  in  the  local 
diet  is  on  a  religious  basis,  an  arrangement 


122      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

which  might  well  be  followed  in  the  new 
kingdom. 

The  province  of  Carniola,  adjoining  Croatia- 
Slavonia,  is  almost  entirely  Slovene.  The 
Slovenes,  while  akin  to  the  Serbs,  are  less 
closely  connected  with  them  than  the  Croats. 
Their  national  consciousness  and  political 
organisation  are  less  highly  developed.  Never- 
theless there  is  a  very  considerable  amount  of 
evidence  that  they  desire  to  be  included  in 
the  Southern  Slav  kingdom,  and  if  possible 
it  should  rest  with  the  people  themselves 
whether  they  become  a  part  of  Jugoslavia 
or  remain  within  the  Austrian  frontiers.  The 
more  comprehensively  the  Southern  Slav 
question  is  treated,  the  greater  is  the  chance 
of  the  solution  being  permanent,  and  the  less 
will  be  the  likelihood  of  its  troubling  the 
peace  of  Europe  in  the  future. 

But  it  is  in  regard  to  the  coast  provinces 
with  their  mixed  populations,  Slav,  German, 
Italian,  that  the  greatest  difficulty  arises.  It 
would  be  dangerous  and  futile  to  lay  down 
any  definite  scheme.  It  is  only  possible  to 
indicate  the  three  principles  on  which  the 
settlement  must  be  based  if  it  is  not  to  con- 
tain the  seed  of  future  troubles.  Wherever 
possible,  the  wishes  of  the  inhabitants  should 


ITALY   AND   THE    SLAVS  123 

form  the  deciding  factor  ;  there  must  be  pro- 
vision for  the  liberties  of  minority  popula- 
tions ;  no  State  should  be  artificially  debarred 
from  access  to  the  sea. 

It  is  this  last  condition  which  is  perhaps 
the  most  important .  The  keynote  of  Austrian 
policy  with  regard  to  Serbia  has  been  the 
desire  to  bar  her  from  the  Adriatic  and  so 
reduce  her  to  economic  dependence  upon  the 
Austrian  markets.  If  Serbia  is  to  have  a  fair 
chance  of  self-development  she  must  receive, 
together  with  Bosnia  and  Herzegovina,  the 
Dalmatian  coast  ;  and  Dalmatia  itself — a 
narrow  coast-strip — is  of  little  value  without 
its  hinterland.  Yet  the  question  is  compli- 
cated by  the  claims  of  Italy.  Although  only 
some  3  per  cent,  of  the  population  of  Dal- 
matia is  Italian,  many  of  the  towns  and  islands 
of  the  coast  were  colonies  of  the  old  republic 
of  Venice  and  remain  largely  Italian  in  cul- 
ture. Moreover,  Italy  has  always  put  for- 
ward a  claim  to  predominant  interest  in  the 
whole  of  the  Adriatic  and  has  recently  asserted 
these  claims  by  her  action  in  Albania.  It  is 
possible  that  some  compromise  may  be 
arrived  at,  yet  having  regard  alike  to  national, 
geographical,  and  economic  considerations,  it 
is  difficult  to  deny  the  claims  of  Serbia  and 


124      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

Montenegro  to  the  whole  of  the  Dalmatian 
coast.  Politically  the  disappearance  of  Aus- 
tria from  the  eastern  shores  of  the  Adriatic 
would  remove  all  danger  to  Italy  and  her 
economic  interests  would  be  best  served  by 
the  development  of  Serbian  prosperity.  It 
should  not  be  difficult  to  secure  her  any 
guarantees  which  she  might  reasonably  de- 
mand for  the  protection  of  her  interests.  It 
would  be  reasonable  to  ask  that  the  con- 
tinuance of  existing  Italian  schools  and  in- 
stitutions in  those  sea-coast  towns  where 
Italian  culture  predominates  should  be  guaran- 
teed by  the  new  State.  Large  powers  of 
municipal  self-government  might  be  con- 
ceded to  the  old  Venetian  colonies  of  Zara, 
Sebenico,  Trau,  Spalato,  Lesina,  and  Curzola, 
and  to  the  one-time  Republic  of  Ragusa  ;  and 
the  Italian  element  might  well  become  an 
important  factor  in  the  development  of 
the  provinces,  with  which  the  prosperity  of 
these  ports  is  so  closely  linked.  An  equi- 
table commercial  convention  between  Italy 
and  Jugoslavia  would  be  beneficial  both  to 
the  development  of  the  Slav  lands  and  to  the 
trade  of  Italy.  Every  effort  should  be  made 
by  a  wise  statesmanship  on  both  sides  to  pro- 
mote good  feeling  and  co-operation  between 


ALBANIA  125 

the  two  kingdoms  which  would  safeguard  the 
legitimate  interests  of  Italy  in  the  Balkans 
without  interposing  an  artificial  bar  to  the 
progress  of  the  Slavs. 

Albania. — We  have  already  referred  to  the 
action  taken  by  Italy  in  Albania.  The  fate 
of  this  little  State  represents  one  of  the  most 
difficult  problems  of  Balkan  politics.  The 
Albanians  are  perhaps  the  most  ancient  of  the 
Balkan  peoples.  They  have  occupied  their  wild 
and  mountainous  districts  since  the  begin- 
ning of  recorded  history.  Their  civilisation  is 
of  the  most  rudimentary  description,  but  they 
have  retained  their  distinctive  customs  and 
characteristics,  and  could  not,  with  any  hope 
of  success,  be  incorporated  in  any  of  the  exist- 
ing Balkan  kingdoms.  In  1912-13,  after  the 
first  Balkan  War,  Albania  was  erected  into  an 
independent  principality  under  Prince  Wil- 
helm  of  Wied,  assisted  by  an  International 
Commission  of  Control.  The  experiment  has 
not,  however,  proved  successful.  The  Al- 
banians did  not  take  kindly  to  their  German 
ruler,  and  the  southern  district  of  Epirus 
has  already  broken  off  from  the  principal^ 
and  united  itself  to  Greece.  It  is  said  that 
this  transaction  was  effected  by  political 
10 


126      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

juggling.  On  the  other  hand,  it  is  claimed 
that  the  Epirotes  are  united  to  Greece  by 
economic  considerations  and  that  their  mem- 
bership of  the  Orthodox  Church  (the  majority 
of  the  Albanians  are  Moslems)  and  the  influ- 
ence of  Greek  culture  incline  them  to  union 
with  the  southern  kingdom.  The  greater 
part  of  Albania,  however,  is  neither  Serbian 
nor  Greek  in  sympathy.  Its  chief  importance 
lies  in  the  possession  of  the  seaport  of  Valona, 
which  holds  an  important  strategical  position 
on  the  Adriatic.  For  this  reason  it  has  been 
a  cardinal  maxim  of  Italian  policy  that  no 
other  Power  can  be  allowed  to  acquire  a  pre- 
dominant position  in  Albania,  and  since  the 
outbreak  of  the  war  Italian  troops  have 
occupied  Valona.  There  has  been  a  con- 
siderable amount  of  friendly  intercourse  be- 
tween Italy  and  Albania  in  the  past,  and 
during  the  period  of  the  mixed  commission 
in  Macedonia,  Italian  officers  showed  con- 
siderable gifts  for  the  sympathetic  adminis- 
tration of  Albanians.  It  would  probably  be 
wise,  if  possible,  to  preserve  the  independence 
of  Albania,  but  if  this  should  prove  impos- 
sible owing  to  the  difficulty  of  organising 
a  stable  government,  an  Italian  protectorate 
would  perhaps  prove  the  best  solution  of  the 


MONTENEGRO  127 

difficulty,  so  far  as  the  Albanians  themselves 
were  concerned.  Whatever  is  done,  however, 
must  be  done  with  due  regard  for  Serbian  in- 
terests and  susceptibilities.  The  creation  of  an 
Italian  Gibraltar  at  Valona,  or  an  unduly  for- 
ward policy  in  the  delimitation  of  the  frontier, 
might  seriously  compromise  the  good  relations 
between  Italyandthe  SouthernSlavswhich  will 
be  essential  to  the  future  peace  of  the  Adriatic. 

The  little  kingdom  of  Montenegro,  whose 
inhabitants  are  Serbian  by  race  but  have  a 
distinct  nationality  and  history  of  their  own, 
will  probably  become  more  and  more  closely 
connected  with  its  larger  and  more  powerful 
ally.  It  may  probably  be  possible  to  reward 
its  services  by  the  cession  of  a  useful  port  (it 
has  strong  claims  upon  Scutari,  now  included 
in  Albania)  ;  but  the  civilisation  of  the  Mon- 
tenegrins is  too  rudimentary  to  render  any 
great  extension  of  their  territory  desirable.  In 
free  access  to  the  sea  and  in  close  economic 
and  political  relationships  with  Serbia  will 
rest  the  best  hope  for  their  future. 

The  Roumanians. — We  have  been  dealing 
so  far  with  the  Slavonic  peoples  of  Austria- 
Hungary,  and  it  is  the  Slav  problem  which 


128      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

has  been  the  main  preoccupation  of  Austrian 
statesmanship  and  the  immediate  cause  of 
the  present  war.  There  is,  however,  a  large 
Latin  or  quasi-Latin,  population  in  the  Dual 
Monarchy  which  has  also  provided  an  active 
element  of  unrest. 

We  have  already  mentioned  that  about 
one-third  of  the  inhabitants  of  Bukovina  are 
Roumanians  (there  are  about  a  quarter  of  a 
million  of  them).  The  Roumanians  of  the 
Dual  Monarchy,  however,  are  chiefly  to  be 
found  in  Hungary,  where  there  are  some 
three  millions,  chiefly  in  the  province  of 
Transylvania.  The  Roumanians  are  an  in- 
teresting race  who  claim  to  be  descended  from 
the  Latin  population  of  the  Eastern  Empire. 
After  many  centuries  of  invasion  and  sub- 
mersion the  race  must  have  become  very 
mixed,  yet  they  have  clung  with  singular 
tenacity  to  their  language,  a  corruption  of 
Latin,  and  to  their  separate  nationality. 
The  Roumanian  inhabitants  of  Transylvania 
have  suffered  greatly  from  Magyar  oppres- 
sion ;  their  language  is  unrecognised,  their 
education  is  hindered,  their  representation  in 
the  Austro-Hungarian  Parliament  has  been 
reduced  to  insignificance  by  political  gerry- 
mandering and  by  gross  corruption  and  in- 


ROUMANIAN    POLICY  I2Q 

timidation  at  elections,  and  the  most  constitu- 
tional protest  is  treated  as  an  act  of  treason. 
Undoubtedly  they  look  for  deliverance  from 
this  grinding  tyranny  to  the  adjoining  inde- 
pendent Kingdom  of  Roumania.  The  pro- 
mises of  reform  made  to  them  by  Hungary 
since  the  outbreak  of  the  war  are  bribes  the 
value  of  which  is  shown  by  the  whole  course 
of  Magyar  rule. 

The  position  of  Roumania  in  Balkan  politics 
has  been  peculiar.  During  the  Turkish 
supremacy  the  principalities  of  Wallachia  and 
Moldavia  enjoyed  a  certain  amount  of  au- 
tonomy. They  were  united  in  1859,  and  after 
the  war  of  1878,  in  which  the  Roumanian 
army  gave  very  efficient  assistance  to  Russia, 
the  new  principality  became  completely  inde- 
pendent. In  1881  the  Prince  took  the  title 
of  king.  The  Roumanians,  however,  were 
justly  dissatisfied  with  their  treatment  by 
the  Russian  Government,  who  acquired  the 
province  of  Bessarabia  (containing  about  a 
million  Roumanians)  as  a  forced  exchange  for 
the  Dobrudja.  The  latter  district  contains 
a  mixed  population  of  Turks,  Tartars,  Bulgars, 
and  others,  and  its  possession  was  not  coveted 
by  the  Roumanian  people.  Moreover,  the 
reigning  house  of  Roumania  is  a  branch  of 


130      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

the  Hohenzollern  family.  Thus,  dynastic  ties 
and  jealousy  of  Russian  influence  led  the 
Roumanian  Government  to  attach  itself  rather 
to  the  policy  of  the  Triple  Alliance  than  to 
that  of  the  Slavs.  On  the  other  hand,  the 
ill-treatment  by  the  Magyars  of  their  Rou- 
manian subjects  led  to  a  strong  popular 
feeling  in  favour  of  intervention.  In  the  first 
Balkan  War,  Roumania  stood  aside  from  the 
Slav  alliance,  but  the  interference  of  Austria 
in  the  peace  negotiations  alienated  the  Rou- 
manian Government,  and  the  second  Balkan 
War  found  Roumania  ranging  herself  on  the 
side  of  Serbia  and  Greece.  Since  then, 
Roumanian  policy  has  tended  to  follow  the 
lead  of  Russia  rather  than  of  Austria. 

The  course  of  the  present  war,  with  the 
threatened  break-up  of  the  Austro-Hun- 
garian  Empire,  could  hardly  leave  the  Rou- 
manians unmoved,  and  a  very  strong  move- 
ment arose  in  favour  of  seizing  the  opportunity 
to  deliver  Transylvania  from  the  Magyars. 
At  the  moment  of  writing  Roumanian  inter- 
vention has  not  taken  place,  but  is  a  probable 
event  of  the  next  few  months. 

If  it  takes  place,  Roumania  will  certainly 
demand  the  Roumanian  districts  of  Hungary 
as  the  price  of  her  support.     It  is  strongly 


IRAN SYLVAN!  A  I3I 

Urged  in  many  quarters  that  any  transfer  of 
these  districts  should  be  strictly  conditional 
upon  her  taking  up  arms  on  the  side  of  the 
Allies.  From  the  point  of  view  of  orthodox 
statecraft,  this  position  is  unassailable,  and 
it  is  supported  by  a  very  natural  disinclina- 
tion to  pull  other  people's  chestnuts  out  of  the 
fire.  At  the  same  time  there  is  something  a 
little  repulsive  to  British  feelings  in  making 
an  act  of  justice,  involving  the  happiness  of 
three  millions  of  people,  a  mere  matter  of  bar- 
gaining. From  the  point  of  view  of  the  wider 
statesmanship  the  expansion  of  Roumania 
to  her  natural  limits  is  undoubtedly  desirable. 
It  is  the  only  solution  of  the  Transylvanian 
question  which  could  be  regarded  as  final. 
The  principle  of  nationality  has  taken  such 
deep  root  and  is  so  closely  linked  with  the 
ideals  of  modern  democracy,  that  it  cannot 
be  ignored  in  the  settlement  without  running 
a  grave  risk  of  future  unrest  and  conflict. 
It  would  be  impossible  for  Roumania  to 
come  without  reserve  into  any  South-Eastern 
League  or  European  Alliance  while  this  ques- 
tion remained  unsettled.  On  the  other  hand, 
a  compact  and  homogeneous  Roumanian 
kingdom  of  ten  or  twelve  millions,  which  had 
reached  the  limits  of  its  natural  expansion, 


132      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

might  form  a  stable  and  useful  member  of 
the  European  system.  On  every  ground,  its 
settlement  is  desirable.  As  a  matter  of 
practical  politics,  it  would  undoubtedly  very 
much  facilitate  dealing  with  the  question  if 
Roumania  were  to  intervene,  and  for  that 
reason  many  who  shrink  from  the  idea  of  any 
extension  of  the  conflict  yet  hope  for  her 
intervention  ;  but  that  intervention  will  not 
affect  the  abstract  justice  of  the  case.  It  is 
possible  that  it  might  complicate  it  by  lead- 
ing to  the  putting  forward  of  excessive  de- 
mands. The  Roumanian  population  in  Hun- 
gary is  not  entirely  concentrated,  and  the 
forcible  transfer  of  every  district  in  which  a 
Roumanian  element  could  be  found  would 
only  result  in  the  creation  of  new  difficulties. 
The  question  of  Bukovina  with  its  Roumanian 
and  Ruthenian  elements  will  no  doubt  be  a 
matter  of  arrangement  between  Roumania 
and  Russia  ;  but  the  whole  question  of  fron- 
tiers will  require  a  careful  and  far-sighted 
statesmanship.  Whether  it  would  be  pos- 
sible without  violating  sound  principles  to 
find  for  Russia  any  compensation  for  which 
she  would  exchange  the  Roumanian  portions 
of  Bessarabia,  may  be  problematical.  There 
can  be  no  doubt  that  such  a  rounding  off  of 


THE    POSITION    OF   BULGARIA  I33 

the  Roumanian  kingdom  would  beneficially 
affect  the  settlement.  It  would  remove  the 
last  trace  of  hostility  between  Roumania  and 
Russia  and  would  thus  get  rid  finally  of  an 
element  of  disturbance  in  Balkan  politics 
which  might  otherwise  prove  a  source  of 
future  trouble. 

Bulgaria  and  a  Balkan  Entente. — While 
Bulgaria  is  not  a  party  to  the  present  war,  it 
is  obvious  that  no  settlement  of  the  Balkan 
question  can  be  permanent  which  fails  to 
take  account  of  Bulgarian  claims.  The 
original  treaty  between  the  Balkan  Allies  in 
1912  provided  for  a  division  of  the  spoils 
roughly  on  national  lines  ;  but  when  the 
interference  of  Austria  barred  the  Serbians 
from  the  coast,  they  sought  extension  to  the 
south-east  and  came  into  collision  with  their 
ally.  The  defeat  of  Bulgaria  and  the  inter- 
vention of  Roumania  resulted  in  the  acquisi- 
tion by  Serbia  and  Greece  of  districts  in 
Macedonia  to  which  Bulgaria  laid  claim,  and 
in  the  annexation  of  Bulgarian  territory  by 
Roumania. 

The  blame  for  the  outbreak  of  the  second 
Balkan  War  is  variously  apportioned.  Some 
students    of    Balkan    politics    consider    that 


134      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

Bulgaria  was  unreasonable  in  standing  out 
for  her  strict  treaty  rights  in  the  changed 
circumstances  produced  by  Austria's  inter- 
ference. Others  contend  that  Serbia  and 
Greece  acted  ungratefully  to  the  State  which 
had  borne  the  chief  part  in  breaking  the  power 
of  Turkey.  Be  this  as  it  may,  there  can  be 
no  doubt  of  the  strength  of  Bulgarian  resent- 
ment. It  must  be  remembered  that  the 
Bulgarians  have  no  kindred  people  outside 
the  Balkans.  They  can  expand  only  within 
the  peninsula,  and  the  question  of  Macedonia 
is  the  main  preoccupation  of  their  policy. 

The  inhabitants  of  Macedonia  are  so  mixed 
up  together  that  any  attempt  to  divide  the 
territory  on  strict  ethnic  lines  would  be  hope- 
less. There  is  little  doubt,  however,  that  the 
political  sympathies  of  the  Monastir  district, 
originally  allotted  to  Bulgaria,  lean  towards 
that  State  ;  and  the  majority  of  the  inhabi- 
tants belong  to  the  Exarchate  Bulgarian 
Church.  It  is  this  district  which  Bulgaria 
most  keenly  desires,  and  if  it  could  be  trans- 
ferred to  them  they  might  relinquish  their 
claims  in  the  middle  district  which  is  neither 
strongly  Serb  nor  Bulgar. 

It  is  believed  that  the  Serbians  would  not 
be  altogether  unwilling,  if  their  expansion  to 


MACEDONIA   AND   THRACE  135 

the  north  and  west  could  be  assured,  to  make 
concessions  in  Macedonia.  It  is  equally  pro- 
bable that  Roumania,  if  she  decides  to  inter- 
vene, might  be  willing  to  purchase  Bulgarian 
neutrality  by  retrocession  of  the  annexed 
territory.  It  is  earnestly  to  be  hoped  that 
any  adjustments  on  these  lines  which  may  be 
arrived  at  will  be  facilitated  by  the  Great 
Powers.  Should  the  Turk  be  cleared  out  of 
Thrace,  it  would  probably  be  wise  to  allow 
Bulgaria  to  extend  her  frontiers  in  this  pro- 
vince. Thrace  has  been  frightfully  depopu- 
lated by  the  Turkish  rule,  but  it  is  a  district 
of  great  possibilities  which  the  hard-working 
and  industrious  Bulgars  might  be  trusted  to 
turn  to  account.  The  possession  of  Adrian- 
ople,  an  important  railway  centre  as  well  as 
a  great  fortress,  would  be  both  strategically 
and  economically  valuable  to  them,  and 
there  does  not  seem  to  be  any  reason  why 
they  should  not  obtain  a  footing  on  the  Sea 
of  Marmora.  So  far  as  racial  considerations 
are  concerned,  their  claim  in  Thrace  is  as 
good  as  any  one's,  and  geographically  it  is 
undoubtedly  strong. 

One  strong  consideration  which  may  weigh 
with  Serbia  against  satisfaction  of  the  Bul- 
garian claims  in  Macedonia  is  the  disinclina- 


I36      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

tion  to  place  another  boundary  between 
themselves  and  the  great  seaport  of  Salonika, 
now  in  Greek  territory.  This  consideration 
will,  however,  have  less  weight  if  Serbian 
aspirations  on  the  Adriatic  are  satisfied,  and 
it  would  wholly  disappear  if  Salonika  could 
be  established  as  a  free  port  for  the  whole 
Balkan  hinterland. 

The  whole  question  of  Bulgarian  claims  is 
one  which,  while  it  stands  a  little  outside  the 
objects  of  the  war,  is  a  very  important  factor 
in  the  settlement  of  the  Balkans  and  the 
future  peace  of  Europe.  It  may  be  asked 
whether  Serbia  can  reasonably  be  asked  in 
the  hour  of  victory  to  make  concessions  to 
her  neighbour  ;  but  the  wiser  statesmanship 
would  certainly  realise  that  the  Balkan 
problem  can  never  be  finally  disposed  of  by 
an  arrangement  which  leaves  any  of  the  States 
with  reasonable  grounds  of  discontent. 

It  would  no  doubt  be  difficult  to  persuade 
any  Balkan  State  to  make  concessions.  Their 
rivalries  are  too  deep-seated  for  the  adjust- 
ment of  their  conflicting  claims  to  be  easy. 
But  the  majority  of  them  have  interests  out- 
side the  peninsula  which  can  only  be  secured 
to  them  by  the  consent  of  the  Great  Powers. 
Moreover,   they  all   require   money   for   the 


A    POSSIBLE    BALKAN   ENTENTE  137 

development  of  their  resources  ;  Serbia  (and 
Roumania  if  she  intervenes)  will  require  money 
to  defray  the  cost  of  war,  and  the  Powers 
which  find  this  money  will  acquire  an  influence 
in  the  settlement  of  Balkan  questions.  No 
one  would  wish  that  the  influence  of  Britain, 
of  France,  or  of  Russia  should  be  used  to 
impose  upon  the  Balkan  States  an  artificial 
settlement.  Such  a  step  would  only  lead  to 
renewed  outbreaks.  It  is,  however,  much 
to  be  hoped  that  by  mediation  between  the 
Balkan  governments,  by  their  disinterested 
advice,  and  by  a  legitimate  use  of  such  influ- 
ence as  their  position  gives  them,  they  may 
be  able  to  assist  in  effecting  a  settlement  of 
Balkan  affairs  which  will  satisfy  all  reason- 
able national  and  economic  aspirations  of  the 
various  peoples.  If  this  were  accomplished, 
and  if  the  external  problems  which  have  so 
gravely  complicated  Balkan  politics  are  re- 
moved by  the  expansion  of  Serbia  and 
Roumania  to  their  natural  limits,  and  the 
acquisition  by  Greece  of  those  Greek  islands 
which  are  still  under  alien  rule,  there  would 
be  a  better  opportunity  for  internal  develop- 
ment and  for  co-operation  between  the 
peoples  than  has  ever  yet  been  given  them. 
It  is  hardly   fair  to  judge   of  the   political 


138      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

capacity  of  the  Balkan  nations  from  the  brief 
and  troubled  period  which  has  elapsed  since 
their  emergence  from  the  crushing  and  de- 
moralising Turkish  rule.  An  equitable  settle- 
ment might  well  lay  the  foundation  of  a 
future  Balkan  League  which  should  include 
all  the  States  and  might  in  time  be  accom- 
panied by  some  fiscal  arrangement  in  the 
nature  of  a  Zollverein.  Such  a  result  would 
not  only  bring  to  these  lands  a  peace  and 
prosperity  to  which  they  have  long  been 
strangers,  but  would  remove  the  most  dan- 
gerous of  the  storm-centres  which  have 
troubled  the  peace  of  Europe. 

Constantinople. — When  the  Turkish  Govern- 
ment allowed  themselves  to  be  dragged  bj^ 
Germany  into  a  war  with  which  they  were 
not  concerned,  they  probably  sealed  the 
doom  of  the  Turk  in  Europe.  It  has  alread}^ 
been  suggested  that  Bulgaria  might  well  re- 
ceive an  extension  of  territory  in  Thrace  and 
that  Greece  should  acquire  the  remaining 
Greek  islands.  The  outstanding  question, 
however,  is  that  of  Constantinople. 

The  importance  of  Constantinople  as  the 
doorway  between  East  and  West,  which  at 
one    time    made  it  a  seat  of  Empire,   has 


CONSTANTINOPLE  139 

greatly  diminished  with  the  multiplication  of 
communications.  It  still  remains,  however, 
a  position  of  considerable  commercial  and 
strategical  importance.  To  Great  Britain  its 
importance  has  always  been  that  in  Russian 
hands  it  would  afford  an  outlet  for  the  Black 
Sea  Fleet  upon  the  flank  of  our  nearest  route 
to  India.  We  fought  the  Crimean  War,  we 
risked  war  in  1878,  to  retain  it  in  Turkish 
hands.  We  have  always  attached  immense 
value  to  the  Conventions  by  which  the  Dar- 
darnelles  are  closed  to  warships,  except  with 
Turkish  permission. 

There  was  here  a  real  conflict  of  interest  ; 
but  since  strategy  is  but  the  instrument  of 
policy,  it  would  seem  that  where  strategical 
and  political  considerations  clash,  the  latter 
must  decide.  A  strategical  advantage  may 
be  dearly  purchased  at  the  expense  of  a 
policy  of  artificial  restriction  which  renders 
cordial  co-operation  between  two  nations  im- 
possible. The  ideal  solution  might  be  for 
Constantinople  to  become  a  free  port  and  city 
under  international  control.  The  working  of 
such  control,  however,  is  never  free  from 
difficulty,  and  if  Russia,  whose  desire  for  an 
ice-free  port  has  been  the  keynote  to  her 
policy  of  expansion  in  Europe,   desires  the 


140      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

city,  it  is  at  least  doubtful  whether  we  should 
be  wise  to  oppose  her  wish.  It  would  cer- 
tainly be  better  for  the  peace  of  Europe  that 
she  should  gain  her  point  here  than  by  the 
annexation  of  Baltic  provinces  of  a  purely 
German  character.  It  should  be  possible  to 
secure,  by  treaty  with  Russia,  such  arrange- 
ments for  trade  and  navigation  as  would  safe- 
guard our  economic  interests.  It  may  even 
be  a  question  whether  Constantinople  might 
not  become  a  free  port  under  the  Russian 
flag,  the  Dardanelles  being  neutralised  and 
the  fortifications  demolished. 

Geographical  considerations  would,  of  course, 
indicate  the  acquisition  of  the  city  by  one 
of  the  Balkan  States,  or  its  control  by  a 
revived  Balkan  League.  But,  even  apart 
from  the  question  of  Russian  claims,  there  is 
no  Balkan  State  whose  resources  would  be 
equal  to  the  task  of  administering  the  great 
city  and  its  commerce,  and  even  the  Balkan 
League  (itself  a  dream  of  the  future)  might 
hardly  prove  a  capable  guardian  of  such  vast 
interests.  It  is  not  to  be  supposed  that  the 
acquisition  of  the  city  by  Russia  would  be 
popular  in  the  Balkans,  yet  each  Balkan 
State  would  probably  prefer  to  see  it  in 
Russia's  hands  than  in  those  of  any  other 


THE   TRENTINO   AND   TRIESTE  141 

member  of  their  own  group,  and  the  substitu- 
tion of  Russian  for  Turkish  administration 
would  almost  certainly  give  an  immense 
impetus  to  Mediterranean  trade. 

Turning  from  the  problems  of  the  Near 
East,  we  come  to  those  presented  by  the  rela- 
tions of  Austria  and  Italy. 

The  Trentino  and  Trieste. — When  Italy 
secured  at  once  her  national  unity  and 
her  freedom  from  Austrian  domination,  the 
great  province  of  Venetia  was  left  under 
the  Austrian  yoke.  In  1866,  when  Italy 
joined  Prussia  against  Austria,  she  recovered 
Venetia,  thanks  to  the  victory  of  Prussia  ; 
but  her  own  arms  were  unsuccessful  both  by 
land  and  by  sea,  and  she  was  forced  by  Bis- 
marck to  accept  a  settlement  which  fell  short 
of  full  satisfaction  of  her  claims.  There  are 
to-day  about  three-quarters  of  a  million 
Italians  in  the  Austrian  territories.  The 
greater  part  of  these  are  to  be  found  in  the 
Trentino  (a  district  of  the  Austrian  Tyrol) 
and  in  the  great  seaport  of  Trieste.  Others 
are  to  be  found  scattered  among  the  sea-coast 
towns  and  islands  of  I  stria  and  Dalmatia 

Their  position  is  altogether  different  from 
11 


142      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

that  of  the  Italian  population  in  South-Eastern 
Switzerland.  The  latter  have  become  incor- 
porated into  the  Swiss  nation  and  have  no 
desire  to  exchange  their  Swiss  nationality  for 
union  with  Italy.  The  Italians  of  the  Tyrol, 
on  the  other  hand,  have  never  been  assimi- 
lated by  Austria.  The  oppressive  nature  of 
Autrian  rule  in  Italy  is  bitterly  remembered 
by  all  patriotic  Italians,  and  although  the 
Austrian  fleet  which  won  the  victory  of  Lissa 
was  manned  largely  by  Italians  of  the  coast, 
their  loyalty  was  mainly  due  to  the  personal 
ascendency  of  Tegetthofl  There  is  to-day 
much  unrest  and  much  allegation  of  mis- 
government  among  the  Italian  subjects  of 
Austria,  and  in  Italy  there  is  a  strong  party 
to  whom  all  this  territory  is  known  as  Italia 
irredenta,  or  unredeemed  Italy,  and  who  look 
forward  to  an  opportunity  of  securing  its 
deliverance. 

The  foreign  policy  of  the  newly  formed 
Kingdom  of  Italy  was  necessarily  opportunist. 
There  was  friction  with  France,  and  the  Italian 
Government  depended  largely  upon  Ger- 
many for  support.  Hence  it  was  led  in  1881 
to  join  the  Triple  Alliance,  which  gave  Italy 
a  strong  position  but  imposed  upon  her  an 
armament  expenditure  which  she  was  ill  able 


ITALIA   IRREDENTA  I43 

to  bear,  and  opposed  a  barrier  to  the  hopes 
of  the  irredentist  party.  In  recent  years  the 
Alliance  has  become  less  popular.  The  differ- 
ences with  France  have  been  composed  and 
the  Austrian  policy  in  the  Balkans  has  filled 
the  Italian  Government  with  alarm  for  their 
position  in  the  Adriatic.  Moreover,  both  the 
interests  and  the  sympathies  of  Italians  would 
lead  them  to  support  Great  Britain  rather 
than  Germany  in  the  Anglo-German  conflict. 
There  was,  therefore,  no  very  great  surprise 
felt  when  Italy  at  the  outset  of  the  war  de- 
clined to  recognise  the  casus  belli  as  one  which 
would  necessitate  her  taking  up  arms  on  the 
side  of  Germany  and  Austria.  The  irredentist 
party  have,  of  course,  seen  their  opportunity 
in  the  war,  and  strong  pressure  has  been  put 
upon  the  Italian  Government  to  intervene  on 
the  side  of  the  Allies,  in  the  hope  of  recover- 
ing the  Trent ino  and  Trieste.  Writers  in 
British  newspapers  have  taken  upon  them- 
selves to  assure  the  Italians  that  this  object 
can  only  be  obtained  by  their  intervention. 
The  military  importance  of  that  intervention 
would  be  unquestionable,  but  it  is  open  to 
question  whether  there  are  not  also  advan- 
tages for  the  Allies  in  the  maintenance  of 
Italian  neutrality.     It  is  possible  that  Italy 


144      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

might  render  services  at  the  end  of  the  war, 
as  the  one  great  neutral  Power  in  Europe, 
which  would  be  of  very  great  value.  In  any 
case  the  Italian  Government  will  be  guided  in 
its  action  by  considerations  of  Italian  interests. 
Whether  Italy  enters  upon  the  war  or  not, 
however,  her  sympathetic  support  will  cer- 
tainly be  obtained  for  any  scheme  of  settle- 
ment based  upon  that  principle  of  nationality 
to  which  she  owes  her  own  existence.  It  is 
at  least  arguable  that  whether  she  remains 
neutral  or  becomes  a  belligerent,  the  question 
of  Italia  irredenta  should  be  settled  upon 
national  lines,  both  as  a  matter  of  justice  and 
in  order  to  get  rid  of  a  possible  cause  of  future 
conflict. 

With  regard  to  the  Trentino  no  great 
difficulties  of  boundary-drawing  would  be 
presented.  The  cases  of  the  Dalmatian 
seaports  and  of  Trieste  are  rather  more 
complicated.  We  have  seen  already  that 
whatever  claim  Italy  may  base  on  historical 
associations,  the  overwhelming  majority  of 
the  inhabitants  of  Dalmatia  are  Serbo-Croat, 
and  that  not  only  national  but  geographical 
and  economic  considerations  suggest  that  the 
natural  fate  of  the  province  is  union  with  an 
enlarged  Serbia.     Italy  will  be  fully  entitled 


ITALY   AND   THE   SLAVS  145 

to  demand  guarantees  for  the  good  treatment 
of  the  Italian  inhabitants  and  for  the  pro- 
tection of  her  commercial  interests,  on  the 
lines  already  suggested  ;  but  beyond  this  it 
is  very  much  to  be  hoped  that  she  will  not 
go.  It  would  seem  indeed  that  both  the 
political  and  commercial  interests  of  Italy 
would  best  be  served  by  the  cultivation  of 
friendly  relations  with  Jugoslavia.  Should 
the  work  of  re-construction  in  the  Balkans 
result  eventually  in  the  establishment  of  a 
Balkan  League  and  Zollverein,  this  considera- 
tion would  be  greatly  strengthened,  and  the 
friendship  between  Italy  and  Roumania 
would  facilitate  the  growth  of  such  relations. 
If  the  Italian  claims  are  made  the  subject  of 
frank  discussion  and  friendly  agreement,  it 
should  be  possible  to  satisfy  every  reasonable 
aspiration  of  the  Italian  people  without  doing 
injury  to  those  of  the  Balkan  nations  ;  and 
if  the  Italian  Government  felt  that  any 
sacrifice  was  involved,  it  might  be  possible 
to  find  compensation  for  them  by  conceding 
their  right  to  spheres  of  influence  in  Africa 
or  Asia  Minor.  In  any  such  arrangement  the 
claims  of  Greece  to  Greek  islands  now  occupied 
by  Italy  should  be  included. 

The   question   of   Trieste   is   one   of   some 


I46      TERRITORIAL   PROBLEMS   OF   THE    SETTLEMENT 

difficulty.  The  town  has  been  under  Austrian 
rule  since  1386,  but  the  inhabitants  are  Italian 
both  in  speech  and  feeling.  On  the  other 
hand,  the  Coastland  province  in  which  it 
is  situated  is  inhabited,  outside  the  city, 
by  Slovenes  and  Serbo-Croats.  Moreover, 
Trieste  is  the  one  great  port  of  Austria,  the 
outlet  for  the  trade  of  all  its  German-speak- 
ing provinces.  Again,  the  town  of  Pola  at 
the  southern  extremity  of  the  Istrian  penin- 
sula is  the  one  naval  arsenal  and  port  of  the 
Austrian  Empire,  and  the  loss  of  I  stria  would 
mean  the  automatic  disappearance  of  the 
Austrian  Navy.  This  in  itself  would  have  the 
result  of  greatly  simplifying  the  position  in 
the  Mediterranean  and  might  lead  directly 
to  a  great  reduction  of  armaments  on  the  part 
of  Italy  and  France.  It  is  unthinkable,  how- 
ever, that  Austria  should  consent  to  the 
alienation  of  I  stria  unless  she  were  reduced 
to  the  last  extremity.  The  question  is  one 
of  those  on  which  it  is  particularly  futile  to 
dogmatise,  but  if  it  becomes  practicable  to 
deal  with  it  at  all,  a  permanent  and  peaceful 
settlement  can  only  be  secured  by  taking 
into  full  consideration  the  racial  claims  of  the 
Southern  Slavs,  the  national  aspirations  of 
Italy,   and  the   economic   relations  between 


ISTRIA   AND   TRIESTE  I47 

Trieste  and  the  hinterland.  To  include  the 
port  within  the  Italian  tariff  system  would 
not  only  be  to  cut  off  Austria  from  the  sea 
but  to  ruin  the  trade  of  Trieste  itself.  The 
ideal  solution  would  appear  to  be  its  erection 
into  the  rank  of  a  free  commercial  port,  either 
purely  self-governing  or  under  the  Italian  flag, 
but  in  no  case  shut  off  from  those  commercial 
interests  in  Austria  and  Bohemia  with  which 
it  is  connected  by  vital  necessities. 

These  considerations  will  also  have  to  be 
taken  into  account  in  deciding  the  fate  of  the 
Slovene  districts  by  which  Trieste  is  sur- 
rounded. If  the  Slovenes  of  Carniola  are 
included  in  the  new  Jugoslavia,  the  Slovenes 
of  Istria  may  desire  to  follow  their  example.  If 
Trieste  remains  Austrian,  it  will  be  impossible 
to  insist  upon  frontier  arrangements  which 
would  interpose  a  stretch  of  Slav  territory 
between  the  port  and  the  remainder  of  the 
Empire.  If  Trieste  goes  to  Italy,  or  becomes 
a  free  port,  this  difficulty  would  be  removed, 
but  it  would  be  necessary  to  make  such 
stipulations  with  regard  to  transit  and  tariffs 
as  would  leave  unimpaired  communication 
between  the  port  and  the  provinces  for  which 
it  forms  the  outlet. 

\Ye  have  dealt  now  with  all  those  territorial 


148      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

questions  which  concern  the  provinces  of  the 
Austro-Hungarian  Empire.  There  remain 
the  two  purely  German  problems  of  Alsace- 
Lorraine  and  Schleswig-Holstein. 

Alsace-Lorraine  has  been  for  many  years 
one  of  the  storm-centres  of  Europe.  Into 
the  detailed  history  of  these  provinces  it  is 
not  necessary  to  enter.  This  is  one  of  the 
cases  in  which  the  historical  and  ethnographi- 
cal student  is  apt  to  lose  himself  amongst 
complexities  which  obscure  the  essential  facts 
of  the  situation.  The  politics  of  the  Franks 
have  not  much  bearing  upon  those  of  to-day. 
In  point  of  fact  these  provinces  were  for 
centuries  a  debatable  ground  between  France 
and  the  Empire.  Alsace  was  acquired  by 
Louis  XIV  during  the  Thirty  Years'  War  as 
the  result  of  conquest  pure  and  simple,  while 
Lorraine  finally  became  French  in  the  time 
of  his  successor. 

Long  association  with  France,  however, 
rendered  the  people  mainly  French  in  insti- 
tutions and  sympathy.  They  passed  with 
France  through  the  crisis  of  the  French 
Revolution  with  its  great  resurrection  of 
national  feeling,  and  enthusiastically  accepted 
their  share  in  the  new  national  ideal.     Al- 


ALSACE-LORRAINE  149 

though  mainly  Teutonic  in  origin  and  Ger- 
man in  speech,  the  inhabitants  of  Alsace- 
Lorraine  at  the  time  of  their  annexation  to 
Germany  in  1871  formed  an  integral  part  of 
the  French  nation.  There  is  no  shadow  of 
doubt  that  the  annexation  was  opposed  to 
the  wishes  of  the  majority  of  the  people.  In 
fact,  although  the  annexation  was  defended 
on  historical  and  racial  grounds,  its  real 
motive  was  one  of  strategy.  The  movement 
towards  German  unity  was  due  in  the  main 
to  fear  of  French  aggression,  and  the  advo- 
cates of  annexation  could  point  to  the  fact 
that  Alsace  and  Lorraine  had  been  used  as  a 
back  door  into  Germany  by  French  diploma- 
tists and  armies.  To  the  minds  of  the  German 
soldiers,  the  one  thing  needful  was  to  secure 
for  themselves  the  line  of  the  Rhine  and  the 
great  fortresses  of  Strassburg  and  Metz. 

Notwithstanding  the  resentment  felt  by 
the  people  of  the  provinces,  it  would  seem 
that  the  Germans  had  a  great  opportunity, 
once  the  annexation  had  become  a  fait 
accompli,  to  win  over  a  population  the 
majority  of  whom  were  allied  to  themselves 
in  race  and  language.  It  is  quite  possible 
that  a  wise  and  sympathetic  policy  towards 
them  might  in  time  have  brought  the  Alsatians 


150      TERRITORIAL  PROBLEMS   OF  THE   SETTLEMENT 

and  Lorrainers  to  acquiesce  in  their  incor- 
poration and  accept  their  position  as  members 
of  the  great  German  nation.  The  adminis- 
tration of  the  provinces  by  Germany  has  in 
fact  been  singularly  unsuccessful.  Prussian 
officialism  is  intolerant  and  unsympathetic, 
and  the  rule  of  Germany  in  Alsace-Lorraine 
has  been  that  of  a  conqueror.  The  Alsatian 
question  had  become  yearly  more  acute,  and 
it  became  more  and  more  evident  that  the 
discontent  of  the  people  could  only  be  cured 
by  a  grant  of  local  autonomy.  Among  the 
inhabitants  themselves,  and  also  among  many 
Frenchmen,  the  idea  sprang  up  that  the  best 
hope  of  final  solution  lay  in  the  neutralisation 
of  the  provinces.  With  the  outbreak  of  war, 
however,  the  old  hope  of  their  complete  re- 
covery by  France  has  been  revived,  and  it 
has  been  declared  by  the  French  Premier  to 
form  one  of  the  objects  for  which  France  is 
fighting.  On  this  question  France  will  natur- 
ally expect  to  speak  the  deciding  word  ;  but 
it  is  permissible  to  hope  that  in  the  interests 
of  European  peace,  the  wishes  of  the  inhabi- 
tants may  in  some  way  be  consulted,  possibly 
by  plebiscite.  A  restoration  of  the  provinces 
by  vote  of  the  people  would  be  at  once  of 
happier  augury  for  France  and  less  provoca.- 


V  \LUXEMBURG  1 
v*  V  •  /  I  reves 

.         V'  A      Ui 

\        .   %!.>  °Luxamburi 


SWITZERLAN  D 


ALSACE-LORRAINE. 
151 


152      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

tive  of  future  conflict  than  mere  reconquest. 
It  might  even  be  possible  by  sectional  plebis- 
cite or  otherwise  to  leave  to  Germany  those 
districts  in  which  the  sympathies  of  the 
people  are  overwhelmingly  German,  and  it 
is  hardly  possible  in  this  connection  to  ignore 
the  fact  that  some  300,000  emigrants  from 
Germany  have  come  into  the  provinces  since 
1871.  The  suggestion  of  neutralisation  is 
attractive  enough,  involving  the  complete 
separation  of  the  Franco- German  frontiers  by 
a  belt  of  neutral  territory — Belgium,  Luxem- 
burg, Alsace-Lorraine — but  the  creation  of 
neutral  zones  of  this  kind  is  not  without 
difficulties  and  even  dangers,  even  supposing 
France  would  consent  to  it.  The  proposal 
that  Luxemburg  and  Alsace-Lorraine  should 
be  incorporated  in  the  Belgian  kingdom  is 
one  not  likely  to  be  received  with  any 
enthusiasm  by  the  Belgians  themselves.  It 
would  at  once  greatly  add  to  their  responsi- 
bilities and  introduce  the  complication  of 
alien  elements  into  the  development  of  their 
national  life  and  culture.  A  federal  union  of 
the  neutralised  States  with  Belgium  would 
have  more  chance  of  success.  Yet  it  may  be 
questioned  if  it  would  be  accepted  as  a  final 
solution  by  any  of  the  peoples  concerned. 


A   GREATER   BELGIUM  ?  153 

Territorial  Compensation  to  Belgium. — The 
whole  question  of  territorial  compensation  to 
Belgium  demands  a  word.  It  will  be  obvious 
at  once  that  unless  we  accept  the  Prussian  or 
Austrian  theory  of  the  value  of  domination, 
the  annexation  of  territory  is  not  a  form  of 
compensation  which  a  liberty-loving  people 
is  likely  to  desire.  The  proposal  to  enlarge 
the  Belgian  frontiers  at  the  expense  of  Ger- 
many involves  a  violation  of  the  national 
principle  which  would  create  for  Belgium  all 
the  difficulties  and  dangers  which  beset  a 
State  ruling  alien  populations  by  force.  It 
would  involve  not  only  Belgium  but  Europe 
in  the  practical  certainty  of  a  renewed  con- 
flict as  soon  as  Germany  felt  herself  strong 
enough  to  attempt  reconquest.  Even  were 
the  supposed  material  gain  of  such  an  ex- 
tension of  territory  not  illusory  (a  point 
to  which  reference  will  be  made  in  a  later 
chapter),  we  should  do  well  to  consider  whether 
some  form  of  compensation  cannot  be  found 
less  dangerous  to  Belgium  herself  and  to  the 
peace  of  Europe. 

Schleswig-Holstein. — The  question  of  Schles- 
wig-Holstein  is  sometimes  misunderstood. 
People  write  and  speak  as  if  the  Duchies  were 


154      TERRITORIAL   PROBLEMS   OF  THE   SETTLEMENT 

purely  Danish  territory  which  had  been  un- 
willingly and  violently  torn  from  Denmark. 
As  a  matter  of  fact,  although  the  Duchies 
were  ruled  by  a  member  of  the  Danish  Royal 
House,  they  were  mainly  German  in  popula- 
tion, and  the  attempts  to  incorporate  them 
completely  with  Denmark  led  to  continual 
friction,  ending  in  1849  m  an  armed  rising. 
The  annexation  of  the  Duchies  by  Prussia 
after  the  wars  of  1864  and  1866  was  attended 
by  a  great  deal  of  shady  diplomacy,  but  a 
complete  restoration  of  the  Duchies  to  Den- 
mark would  certainly  not  be  in  accordance 
with  the  principle  of  nationality  or  the  wishes 
of  the  people. 

The  Danish-speaking  inhabitants,  who  num- 
ber about  140,000  out  of  a  population  of  a 
million  and  a  half,  are  concentrated  in  the 
north  of  Schleswig,  and  in  1864  there  was  a 
promise — never  carried  out — of  a  plebiscite 
of  these  districts.  If  this  question,  which  is 
not  at  issue  in  the  present  war,  is  dealt  with 
at  all  in  the  settlement,  it  would  be  sufficient 
for  this  old  promise  to  be  carried  out. 

It  has  been  suggested  in  some  quarters 
that  Danish  territory  should  be  extended 
southward  far  enough  to  include  both  banks 
of  the  Kiel  Canal.     Such  extension  would  be 


Danish  SpeaJdng 
Germ&n  or  Frisian  Speaking 


BBS  Mixed 


Miles 


10  0  10         TO        30        40         50 

SCHLESWIG-HOLSTEIN. 

155 


156      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

a  very  doubtful  blessing  either  to  Denmark 
or  to  Europe.  It  would  involve  for  Denmark 
the  creation  of  very  awkward  and  formid- 
able problems  and  the  constant  fear  of 
German  invasion.  Apart  from  the  fact  that 
such  an  arrangement  would  conflict  with 
that  principle  of  nationality  upon  which  the 
Allies  have  laid  so  much  stress,  it  is  one  which 
could  be  maintained  only  at  the  expense  of 
greatly  increased  risk  of  conflict  and  constant 
readiness  for  war.  The  neutralisation  of  the 
Canal  would  be  a  much  less  objectionable 
alternative,  but  the  possibility  of  attaining 
it  will  depend  largely  upon  the  general  posi- 
tion after  the  war. 

The  Position  of  Austria-Hungary  after  the 
War. — If  the  principle  which  we  have  taken 
as  an  hypothesis  be  true,  it  is  evident  that  it 
must  apply  to  the  nations  against  whom  we 
are  fighting.  It  is  possible,  of  course,  that 
whatever  may  happen  to  their  Slav  and 
Latin  provinces,  Austria  and  Hungary  may 
wish  to  remain  united.  On  the  other  hand, 
there  are  signs  that  the  bond  between  them 
may  very  possibly  be  snapped  by  the  strain 
of  war.  In  that  case  the  Germans  of  Austria 
may  desire  to  enter  into  union  with  their 


THE   FUTURE   OF   AUSTRIA-HUNGARY  157 

kinsmen  of  the  German  Empire.  There  are 
some  observers  who  believe  that  the  Southern 
Germans  will  have  grown  tired  of  the  Prussian 
hegemony  and  that  they  may  wish  to  form  a 
South  German  Confederation  into  which 
Austria  would  enter.  All  this  is  pure  specula- 
tion, but  it  is  desirable  to  bear  in  mind  that 
if  any  such  movement  is  attempted  it  will  be 
the  affair  of  the  Germans  and  Austrians  them- 
selves. If  we  attempt  to  restrict  their  deve- 
lopment by  artificial  limitations  we  shall  be 
adopting  the  policy  which  they  themselves 
have  pursued  and  we  shall  be  obliged  to 
accept  the  militarisation  of  our  own  political 
system  as  the  price  of  our  interference. 

In  point  of  fact,  a  closer  connection  between 
the  Austrian  Germans  and  those  of  Germany 
is  a  contingency  which  the  other  nations  of 
Europe  have  no  reason  to  dread.  Released 
from  the  influence  of  their  bond  to  the  Magyar 
oligarchy  and  from  their  Slavonic  complica- 
tions, the  Austrians  would  form  an  element 
tending  to  balance  the  influence  of  Prussia 
amongst  the  German  peoples,  and  the  results 
might  be  beneficial  both  to  Germany  and  to 
Europe. 

It  is  just  worthy  of  mention  that  should 
the  bond  between  Austria  and  Hungary  be 
12 


158      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

broken  the  position  of  Hungary  will  be  one 
of  some  difficulty.  No  one  who  has  studied 
Hungarian  history  would  wish  for  the  political 
extinction  of  that  brilliant  people,  or  would 
envy  the  Power  which  attempted  to  achieve 
it.  Stripped  of  their  subject  provinces  and 
unable  to  tyrannise  over  others,  the  Magyars 
would  remain  a  distinctive  and  picturesque 
member  of  the  European  family.  With  no 
alliance  to  any  neighbouring  people  in  race, 
in  language,  or  in  culture,  their  independ- 
ence might  perhaps  be  secured  by  a  general 
guarantee  of  the  Powers. 

It  must  not  be  forgotten  that  the  loss  of 
Croatia-Slavonia  would  deprive  Hungary  of 
its  only  seaport — Fiume.  This  is  another 
case  in  which  it  might  be  desirable  to  establish 
a  free  port,  or  to  provide  facilities  which 
would  prevent  the  normal  course  of  commerce 
from  being  interrupted  by  attempts  to  bar 
an  inland  State  from  access  to  the  sea. 

In  all  the  cases  which  we  have  been  con- 
sidering it  will  be  observed  that  the  problem 
has  been  created  by  the  operation  of  a  policy 
of  domination,  by  the  exercise  of  an  alien 
rule  without  regard  to  the  nationality  or  the 
desires    of    the    governed.     In    general,    the 


CONQUEST   AND    POLICY  159 

working  of  this  principle  has  had  two  results  : 
it  has  created  a  centre  of  disaffection  which 
has  hindered  the  internal  progress  of  the 
State,  and  it  has  involved  complications  of 
foreign  policy  creating  continued  friction 
and  the  constant  possibility  of  war.  It  has 
rendered  impossible  any  idea  of  a  general 
European  entente  or  alliance,  by  making  it 
impossible  for  the  nations  concerned  to 
acquiesce  in  a  guarantee  of  the  status  quo. 
If  such  an  entente  is  to  be  a  possibility  of  the 
future  and  if  there  is  to  be  any  chance  of  the 
peace  which  we  make  becoming  permanent, 
the  settlement  must  be  based  upon  a  radi- 
cally different  principle.  If  we  insist  upon 
any  partition  based  upon  merely  strategic 
considerations  or  upon  the  right  of  conquest, 
we  must  at  the  same  time  accept  all  the  risks 
involved  in  a  perpetuation  of  the  system 
which  has  involved  us  in  the  present  struggle, 
and  we  must  look  forward  to  no  effort  of 
international  co-operation  wider  than  that 
comprised  in  temporary  alliances  formed  for 
the  promotion  of  particular  interests  or  for 
off-setting  the  power  of  another  group.  It 
is  essential  that  we  should  realise  this  fact 
if  we  are  to  see  the  situation  clearly.  The 
point  of  view  of  those  who  believe  war  to  be 


l6o      TERRITORIAL   PROBLEMS   OF   THE   SETTLEMENT 

inevitable  and  refuse  to  entertain  any  hope 
of  this  being  the  last  great  European  conflict 
is  perfectly  intelligible  and  consistent.  If  we 
accept  that  view  we  shall  be  justified  in  re- 
stricting our  efforts  at  the  peace  to  the 
securing  of  such  strategic  advantages  and  the 
cementing  of  such  alliances  as  shall  be  of 
most  avail  in  a  renewal  of  the  struggle.  But 
it  is  worth  while  to  consider  whether  this 
war  was  not  rendered  inevitable  by  certain 
definite  errors  of  policy  which  might  have 
been  avoided  by  greater  wisdom  on  the  part 
of  European  statesmen  during  the  past 
hundred  years  ;  and  whether  the  adoption  of 
a  different  policy  might  not  prevent  war 
from  becoming  inevitable  in  the  future. 
What  we  must  not  do  is  to  talk  of  this  as  "  a 
struggle  against  militarism,"  the  "  war  to 
end  war,"  and  then  repeat  the  mistakes 
which  have  brought  about  the  war. 

It  is  likely  enough  that  in  any  case  it  will 
prove  impossible  to  deal  with  all  the  ques- 
tions which  have  been  mentioned  or  to 
secure  an  ideal  solution  of  all  those  which 
are  actually  raised.  What  is  important,  if  we 
look  to  a  better  condition  of  things  in  Europe, 
is  that  we  should  be  clear  in  our  own  minds 
as  to  the  desirability  of  applying  them  wher- 


THE   DIFFICULTIES   OF   PLEBISCITES  l6l 

ever  possible.  If  we  do  that  and  if  these 
principles  are  once  put  into  action,  it  should 
be  possible  in  the  years  to  come  to  apply 
them  gradually  to  the  settlement  of  any 
problems  which  the  peace  leaves  unsolved. 

We  must  not  imagine  that  the  application 
of  these  principles  will  be  easy.  It  seems 
simple  enough  to  talk  of  consulting  the  wishes 
of  the  population  in  provinces  to  be  trans- 
ferred. But  it  is  not  so  easy  to  ascertain 
those  wishes.  The  taking  of  a  plebiscite  is 
not  an  easy  matter,  especially  among  the 
less  settled  peoples.  It  will  not  always  be 
easy  to  see  that  it  is  impartially  taken,  that 
the  issues  are  put  fairly  before  the  people, 
that  no  intimidation  or  bribery  interferes 
with  the  voting.  In  many  cases  it  would  be 
essential  for  the  whole  operation  to  be  carried 
out  by  the  representatives  of  an  impartial 
Power  ;  it  might  even  necessitate  a  temporary 
occupation  by  such  Power  of  the  territory  in 
question.  There  are,  however,  other  methods 
of  estimating  national  feeling.  Race,  re- 
ligion, language,  history,  economic  relation- 
ships, the  known  tendencies  of  the  Press,  of 
political  organisations  and  leaders,  may  all  be 
important  factors  in  arriving  at  a  decision. 
But  to  apply  these  tests,  to  decide  in  a  given 


l62      TERRITORIAL   PROBLEMS   OF   THE    SETTLEMENT 

case  whether  a  plebiscite  is  possible,  or  if  not, 
upon  what  evidence  an  estimate  shall  be 
formed,  requires  first-hand  knowledge  as 
well  as  strict  impartiality. 

The  question  of  guarantees  for  minority 
populations  is  another  difficulty,  which  has 
already  been  touched  upon  in  several  cases. 
There  will  generally  be  a  tendency  for 
scattered  members  of  any  nationality  to  drift 
towards  the  independent  mass  ;  but  many 
minorities  will  remain,  and  where  a  new  State 
is  set  up  or  provinces  transferred,  it  should 
be  possible  to  make  some  provision  for  their 
interests,  by  a  guarantee  of  equal  rights  and 
the  preservation  of  existing  institutions. 

It  is  by  reason  of  such  difficulties  as  these 
that  the  laying  down  of  a  fixed  programme 
by  any  theorists,  however  able,  bears  so 
strong  a  stamp  of  unreality.  It  is  not,  how- 
ever, the  method  which  is  of  supreme  import- 
ance, but  the  principle.  If  the  principle  is 
once  frankly  accepted,  European  statesman- 
ship should  be  equal  to  the  task  of  carrying- 
it  out.  If  the  efforts  of  statecraft  and  diplo- 
macy were  unequal  to  the  task  of  preventing 
the  present  war,  it  was  not  through  lack  of 
ability,  but  because  of  the  principles  on  which 
they  were  based.     If  the  Allies  are  victorious 


THE   TASK   OF   EUROPEAN    STATESMANSHIP      163 

they  will  have  such  an  opportunity  as  has 
never  been  presented  before  to  secure  an 
attempt  at  removing  the  most  serious  causes 
of  European  unrest.  By  availing  themselves 
of  this  opportunity  in  the  teeth  of  all  diffi- 
culties, by  facing  these  difficulties  at  once 
with  the  sympathetic  insight  of  those  to 
whom  national  ideals  and  aspirations  are 
dear  and  with  the  practical  wisdom  of  the 
level-headed  statesman,  they  will  serve  their 
own  most  vital  interests  and  will  earn  the 
gratitude  of  the  civilised  world. 


CHAPTER    V 

COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

When  we  turn  from  the  European  territories 
of  the  belligerent  Powers  to  German  pos- 
sessions and  spheres  of  influence  in  other 
continents,  the  principle  of  nationality  has 
no  longer  any  very  direct  bearing  on  the 
question.  The  colonial  empire  of  Germany 
amounts  to  rather  more  than  a  million  square 
miles,  but  its  white  population  is  well  under 
30,000.  The  natives,  who  form  the  immense 
majority  of  the  inhabitants,  cannot  be  sup- 
posed to  have  any  sentiment  of  German 
nationality.  Their  interests  are  concerned 
simply  with  good  administration,  the  main- 
tenance of  order,  the  improvement  of  their 
conditions  of  life,  and  respect  for  their  tribal 
and  religious  institutions.  Nationality  in  the 
European  sense  does  not  enter  into  the 
matter.  The  one  vital  consideration  which 
may  modify  the  policy  of  the  Allies  is  that 

of   avoiding  as  far  as  possible   occasions   of 

164 


COLONIES   AS    SPOILS   OF   WAR  165 

future  conflict  and  the  creation  of  obstacles 
to  the  future  unity  of  Europe. 

In  all  previous  wars  since  the  period  of 
colonial  expansion  began  in  the  sixteenth 
century,  the  colonies  of  the  vanquished  have 
been  regarded  as  the  legitimate  spoils  of  the 
victor.  They  were  more  easily  occupied  and 
assimilated  than  were  any  portions  of  his 
home  territory ;  and  their  loss,  however 
keenly  felt,  left  a  less  burning  desire  for 
recovery  and  revenge.  In  days  when  the 
colonial  policy  of  all  nations  was  exclusive,  the 
only  country  which  could  profit  largely  from 
the  development  of  a  colony's  resources  was 
that  which  administered  it  politically  ;  and 
the  acquisition  of  sovereignty  wras  of  actual 
commercial  value.  It  may  be  doubted  how 
far  this  policy  of  exclusion  and  monopoly 
was  a  wise  one,  even  in  times  when  the 
economic  interdependence  of  nations  was  in 
its  infancy.  It  was,  however,  a  universal 
condition  which  practical  statesmen  had  to 
face  ;  and  the  only  means  whereby  the  people 
of  any  State  could  draw  large  profits  from 
the  trade  of  a  colony  was  for  the  State  to 
acquire  sovereignty  over  it. 

To-day  these  conditions  have  to  a  great 
extent  vanished.     The  policy  of  exploitation 


l66      COLONIAL   QUESTIONS   IN   THE    SETTLEMENT 

has  proved  impossible  under  modern  condi- 
tions ;  and  in  order  to  render  a  colony  pros- 
perous it  has  been  found  necessary  to  allow 
its  economic  development  to  follow  natural 
lines.  The  success  of  the  British  colonial 
system  has  been  due  to  the  complete  freedom 
given  to  the  British  Overseas  Dominions  in 
the  development  of  their  institutions  and 
commerce,  while  the  collapse  of  the  great 
Spanish  Empire  was  due  to  a  persistent 
attempt  to  regulate  the  trade  of  the  colonies 
for  the  exclusive  benefit  of  the  mother- 
country. 

The  strength  of  the  British  Empire  to-day, 
the  value  of  the  Dominions  as  customers  and 
producers,  their  contributions  to  the  develop- 
ment of  British  civilisation  and  their  assist- 
ance in  war,  are  due  to  three  things. 

In  the  first  place,  the  British  people  may 
fairly  claim  to  be  born  colonisers.  They 
have  emigrated  in  millions  to  the  Overseas 
Dominions  and  have  shown  a  remarkable 
ability  not  merely  to  develop  their  resources, 
but  to  build  up  great  communities  whose 
civilisation  has  developed  along  British 
lines,  though  marked  by  strong  distinctive 
characteristics. 

In  the  second  place,  the   British  colonial 


BRITISH    COLONIAL   POLICY  167 

policy  has  been  more  and  more  based  on  non- 
interference with  natural  development.  The 
Empire  to-day  is  in  fact  a  confederation  of 
independent  nations  between  whom  the  use 
of  force  has  been  wholly  abandoned  as  an  in- 
strument of  policy  and  whose  relations  are 
based  solely  upon  mutual  consent. 

In  the  third  place,  it  is  fair  to  point  out  that 
the  national  genius  for  colonisation  has  been 
developed  under  circumstances  of  peculiar 
advantage,  owing  to  the  fact  that  Great 
Britain,  as  an  insular  and  naval  power,  was 
first  in  the  field.  The  beginning  of  the  nine- 
teenth century  saw  the  British  race  already 
established  in  those  lands  which  were  most 
suitable  for  colonisation  by  Europeans.  To- 
day a  German  Canada  or  Australia  is  unthink- 
able. A  population  of  several  millions  of 
highly  civilised  people  with  firmly  settled 
institutions  cannot  be  wiped  out  or  expro- 
priated, even  if  the  stupendous  difficulties  of 
military  occupation  could  be  overcome.  At 
the  same  time,  the  reproaches  heaped  upon 
Great  Britain  as  a  land-grabber  and  a  pirate 
are  in  the  main  unjust.  The  growth  of  her 
Empire  has  been  along  lines  of  natural  ex- 
pansion and  the  development  of  its  resources 
has  benefited  the  world  at  large.     The  British 


l68      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

Dominions,  in  fact,  form  markets  and  fields  of 
emigration  for  all  nations. 

When  Germany,  in  the  early  'eighties,  first 
turned  her  thoughts  to  colonial  expansion, 
the  only  considerable  fields  which  seemed  to 
be  open  to  her  were  in  Africa.  At  that  time 
all  the  Great  Powers  were  busy  staking  out 
claims  in  the  newly  discovered  regions  of 
the  Dark  Continent.  German  explorers  had 
played  an  important  part  in  opening  up  the 
unknown  territories  and  the  German  people 
were  eager  not  to  be  left  out  of  the  division. 
It  is  very  much  to  be  regretted  that  no 
sincere  attempt  was  made  by  the  various 
Powers  concerned  to  come  to  a  reasonable  and 
equitable  understanding  as  to  their  spheres 
of  influence.  We  are  apt  to  forget  how  near 
Great  Britain  and  France  came  to  the  brink 
of  war  over  the  question  of  obscure  African 
boundaries.  We  have  not  perhaps  realised 
how  salutary  a  lesson  is  conveyed  by  the  ease 
with  which  those  questions  were  adjusted  as 
soon  as  they  were  approached  with  goodwill 
on  both  sides.  The  same  sort  of  friction  arose 
between  Germany  and  Great  Britain.  The 
Germans  regarded  the  British  as  land-grabbers 
who  desired  to  retain  a  monopoly  of  colonial 
expansion  ;   and  in  order  to  circumvent  their 


THE  SCRAMBLE  FOR  AFRICA         169 

presumed  opposition,  resorted  to  some  rather 
shabby  trickery  in  founding  their  claims. 
The  British,  on  the  other  hand,  showed  an 
unfortunate  tendency  to  consider  that  their 
establishment  in  any  particular  district  gave 
them  the  right  to  set  up  a  claim  to  exclusive 
control  of  the  whole  surrounding  country. 
"  The  result,"  to  use  the  words  of  Mr.  Evans 
Lewin,  "  was  an  unfortunate  and  undignified 
scramble  for  territory,  marked  with  consider- 
able ill-feeling  on  both  sides,  which  led  to  a 
series  of  misunderstandings  and  incidents  that 
might  have  been  avoided  if  the  initial  steps 
had  been  less  open  to  misconstruction.  In 
the  founding  of  colonies  there  must  inevitably 
be  clashing  of  interests,  especially  when  other 
nations  have  acquired  or  are  seeking  to 
acquire  territories  in  the  neighbourhood. 
True  statesmanship  consists  in  the  reconcilia- 
tion of  these  divergent  interests  and  in  the 
conciliation  of  conflicting  claims  and  appar- 
ently irreconcilable  desires."  '  One  can 
hardly  avoid  the  reflection  that  it  is  not 
only  in  Africa  that  the  general  adoption  of 
this  view  of  statecraft  might  have  saved  the 
nations  from  catastrophe. 

However,  at  the  cost  of  considerable  fric- 

1  The  Germans  in  Africa  (Oxford  Pamphlets),  p.  14. 


170      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

tion  both  with  the  British  and  the  French, 
the  Germans  did  acquire,  between  1884  and 
1890,  four  considerable  African  colonies — 
Togoland,  Kamerun,  German  South- West 
Africa,  and  German  East  Africa.  During  the 
same  period  they  hoisted  their  flag  over  a 
number  of  Pacific  archipelagoes  and  a  por- 
tion of  the  great  island  of  New  Guinea.  To 
these  a  couple  of  Samoan  Islands  were  added 
in  1899  as  the  result  of  an  agreement  with 
Great  Britain  and  America.  In  1897  the 
territory  of  Kiau-chau  was  acquired  from 
China  as  an  indemnity  for  the  murder  of  two 
German  missionaries.  The  total  area  of  this 
Overseas  Empire  amounts  to  about  1,100,000 
square  miles.  The  white  population  (inclu- 
sive of  troops)  is  a  little  under  30,000,  of 
whom  nearly  15,000  are  in  German  South- 
West  Africa.  The  native  population  is  about 
thirteen  millions.  The  expenditure  upon  the 
colonies  for  1913  was  estimated,  in  round 
figures,  at  £7,450,000,  of  which  about 
£5,340,000  was  to  be  met  by  subventions  from 
the  Imperial  Government  and  the  remainder 
to  be  raised  locally.  The  total  exports  from 
Germany  to  her  colonies  in  1912  amounted 
to  £2,865,000.  Imports  from  the  colonies, 
£2,645,000. 


GERMAN    COLONIAL   POLICY  171 

From  these  figures  it  will  be  seen  that  the 
German  colonies  have  not  been  successful 
in  attracting  German  immigrants.  German 
emigration,  which  has  decreased  in  recent 
years,  has  always  tended  to  go  rather  to 
countries  already  settled,  especially  to  the 
United  States,  South  America,  and  the  British 
Dominions,  where  Germans  form  important 
elements  of  the  population.  Although  lost 
in  this  way  to  the  German  flag,  there  can  be 
no  doubt  that  their  presence  has  opened  up 
excellent  fields  for  German  trade  and  finance, 
and  it  is  in  these  countries  that  the  real  over- 
seas interests  of  Germany  are  to  be  found. 
The  colonies,  as  will  be  seen,  do  not  yet  pay 
their  way,  and  their  trade  with  the  mother 
country  forms  a  relatively  negligible  propor- 
tion of  German  commerce. 

Generally  speaking,  the  German  colonial 
policy  has  been  a  liberal  one.  They  have 
done  much  for  exploration  and  scientific 
knowledge,  have  created  excellent  communi- 
cations, and  have  held  the  door  open  to  foreign 
trade  and  capital.  It  is  obvious  that  so  long 
as  this  policy  is  pursued,  it  is  to  the  advan- 
tage of  the  world  generally  that  tropical 
countries  should  be  opened  up,  their  products 
rendered  accessible,  and  their  markets  deve- 


172      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

loped,  no  matter  who  performs  the  task  of 
keeping  order.  Great  Britain  has  already  on 
her  hands  a  sufficient  task  in  consolidating 
the  resources  of  her  wide  Empire,  and  it  is  to 
her  interest  that  a  share  of  the  work  should 
be  performed  by  nations  animated  by  a  liberal 
colonial  policy.  There  was  thus  no  particular 
reason  why  she  should  covet  the  German 
possessions  and  it  is  conceivable  that  it 
would  suit  her  better  that  Germany  should 
continue  to  bear  the  burden  and  expense  of 
their  development.  To  use  the  words  of  Mr. 
H.  S.  Egerton : 

Whoever  knows  anything  of  the  British  Empire  of 
to-day  knows  that  what  occupies  the  minds  and  energies 
of  statesmen  and  administrators  is  not  the  question  of 
its  increase,  but  of  its  development.  Halfpenny  news- 
papers may  talk  cheerfully  of  adding  by  a  stroke  of  the 
pen  German  South-West  and  East  Africa  to  the  Empire  ; 
but  the  responsible  officials  who  know  the  difficulties  in 
the  way  may  be  less  ready  to  welcome  a  new  burden  of 
responsibility.1 

A  good  deal  is  said  about  the  value  of 
tropical  colonies  as  "storehouses"  of  raw 
material  which  will  become  increasingly  valu- 
able to  the  manufacturing  nations  of  Europe, 
but  the  notion  that  by  annexing  them  we 

1  The  War  and  the  British  Dominions  (Oxford  Pamphlets), 
pp.  21-2. 


COLONIES   AND    RAW   MATERIAL  173 

should  become  possessed  of  this  raw  material 
overlooks  the  fact  that  access  to  their  pro- 
ducts is  not  dependent  upon  political  control, 
and  that  annexation  would  not  relieve  British 
manufacturers  from  the  necessity  of  paying 
for  the  supplies  drawn  from  them.  The  point 
will  be  referred  to  again  when  we  come  to  deal 
with  the  economic  aspects  of  the  settlement, 
but  it  may  be  said  at  once  that  there  is  very 
little  foundation  for  the  idea  that  political 
control  of  a  "  plantation  "  colony  can  profit- 
ably be  used  to  divert  its  products  exclusively 
to  the  home  markets  of  the  controlling 
country. 

Apart  from  the  presumed  value  of  the 
German  colonies  themselves,  it  may  be  sug- 
gested that  in  some  cases  their  transfer  to  the 
British  flag  would  facilitate  the  development 
of  colonies  already  established,  as,  for  instance, 
by  enabling  railways  to  be  constructed  which 
would  link  up  existing  systems,  or  by  bring- 
ing under  the  same  control  seaports  and  the 
hinterland  for  which  they  arc  the  natural 
outlet.  In  such  cases,  however,  it  is  obvious 
that  the  advantages  proposed  will  generally 
be  reciprocal  and  that  the  inclusion  in  the 
treaty  of  peace  of  clauses  for  railway  or  tariff 
concessions,  or  a  simple  agreement  between 

13 


174      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

the  Colonial  Offices  of  the  two  Empires,  would 
effect  a  solution  of  these  questions  to  the 
benefit  of  both  parties. 

The  German  colonies  are  not,  generally 
speaking,  districts  in  which  a  great  white 
community  can  be  expected  to  grow  up,  and 
they  thus  lack  the  importance  of  the  British 
self-governing  Dominions  as  sources  of  strength 
in  war.  On  the  other  hand,  they  possess 
ports  which  form  valuable  coaling  stations 
or  naval  bases,  situated  in  many  cases  at 
important  strategic  points.  It  is  an  obvious 
advantage,  both  in  the  attack  and  the  defence 
of  commerce  and  colonial  possessions,  to 
possess  the  greatest  possible  number  of  such 
bases  and  to  restrict  the  number  of  those 
possessed  by  a  prospective  opponent.  The 
introduction  of  wireless  telegraphy  has  greatly 
increased  the  utility  of  such  bases  by  enabling 
them  to  be  used  for  transmitting  news  and 
orders  from  the  home  capital  and  directing 
operations  over  a  great  expanse  of  sea.  Upon 
this  whole  question  generally  there  are  two 
words  to  say.  In  the  first  place,  it  is  a  ques- 
tion of  strategy  pure  and  simple,  and  is 
subject  to  the  considerations  already  pointed 
out  with  respect  to  strategical  advantages  in 
general.     It   is   necessary   to   consider   each 


THE   QUESTION   OF   COALING   STATIONS         175 

individual  case  on  its  merits  and  to  weigh 
its  probable  advantage  in  war  against  any 
additional  risk  of  war  which  its  acquisition 
may  involve.  It  must  be  remembered  in 
this  connection  that  any  apparent  attempt  on 
the  part  of  Britain  to  assert  an  aggressive 
sovereignty  of  the  seas  will  be  watched 
jealously  by  Powers  other  than  her  immediate 
opponents.  It  is  only  just,  however,  to 
observe,  in  the  second  place,  that  the  pre- 
ponderant maritime  interests  of  Great  Britain 
and  the  scattered  nature  of  her  vast  Empire 
give  her  a  peculiar  interest  in  the  question — 
especially  where  the  base  is  situated  upon 
the  main  routes  of  her  trade  or  in  close 
proximity  to  the  ports  of  her  Overseas 
Dominions.  On  the  other  hand,  such  bases, 
unless  very  strongly  fortified,  usually  fall 
into  the  hands  of  the  superior  naval  Power 
during  the  first  few  weeks  of  war. 

As  a  matter  of  fact,  every  colonial  pos- 
session of  Germany  has  already  been  attacked 
and  some  of  them  have  fallen  into  the  hands 
of  the  Allies.  These  operations  formed  a 
natural  part  of  the  general  strategical  scheme. 
Apart  from  any  other  motive,  it  was 
desirable  to  restrict  as  far  as  possible  the 
number  of  harbours  and  bases  available  for 


176      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

the  German  cruisers.  Moreover,  it  has  been 
the  invariable  practice  of  Great  Britain  to 
use  her  maritime  power  in  war  for  the  capture 
of  her  enemy's  colonies,  which  even  if  it 
were  not  desired  to  retain  them,  formed  useful 
counters  wherewith  to  bargain  at  the  settle- 
ment. Whether  colonies  occupied  by  the 
British  forces  should  be  retained,  or  should 
be  restored  to  the  original  holder  in  exchange 
for  other  concessions,  has  depended  upon  the 
circumstances  of  the  peace  and  the  aims  of 
British  policy  in  the  war. 

In  the  present  case  the  position  is  com- 
plicated by  the  fact  that  the  capture  of  the 
German  colonies  has  in  several  cases  been 
entrusted  to  the  forces  of  the  British  Overseas 
Dominions.  In  these  cases,  the  Dominions 
will  certainly  expect,  and  will  be  entitled  to 
demand,  a  voice  in  the  settlement.  The 
declarations  of  British  Ministers  that  we  have 
not  entered  upon  the  war  for  the  purpose  of 
territorial  aggrandisement  can  hardly  be 
taken,  in  any  case,  as  a  definite  pledge  to 
refrain  from  the  annexation  of  such  of 
Germany's  colonial  possessions  as  the  for- 
tunes of  war  may  put  into  our  hands  ;  and 
even  if  the  British  Government  desired  to 
emphasise  its  disinterestedness   by  carrying 


BRITISH    DOMINIONS   AND   GERMAN   COLONIES    I77 

out  such  a  policy,  it  could  not  impose  its 
views  upon  the  self-governing  Dominions  in 
cases  where  their  interests  were  concerned 
and  where  the  capture  had  been  effected  by 
their  forces.  We  may  be  sure,  however, 
that  the  Governments  of  the  Dominions  will 
co-operate  loyally  in  the  carrying  out  of  the 
general  policy  of  the  Empire  and  of  the  Allies 
and  that  they  will  oppose  no  unreasonable 
obstacle  to  such  a  settlement  as  may  offer 
the  best  chance  of  peace  for  the  world.  Their 
position  was  admirably  expressed  by  Mr. 
Allen,  the  New  Zealand  Minister  of  Defence, 
with  reference  to  the  expedition  to  Samoa  : 

The  future  of  the  island  is  an  Imperial  question,  in 
which,  however,  New  Zealand  might  have  something  to 
say.  The  Imperial  authorities  might  be  able  to  utilise 
the  island,  but  that  was  for  the  Imperial  statesmen  to 
decide.  We  have  simply  done  our  duty  as  part  of  the 
Empire  in  carrying  out  the  task  allotted  to  us.1 

Having  glanced  at  the  leading  general 
principles  affecting  the  question  of  the  German 
overseas  possessions,  we  may  proceed  very 
briefly  to  consider  separately  the  various 
colonies  involved.  It  will  not  be  necessary, 
in  dealing  with  them,  to  go  over  the  ground 
already  traversed,  but  it  is  well  that  we  should 

1  Reported  in  Times,  October  22,  191 4. 


178      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

acquaint  ourselves  with  the  actual  problems 
which  will  be  set  before  us  and  with  any 
special  local  conditions  which  may  modify 
the  considerations  discussed.  The  general 
bearing  of  these  considerations  upon  the 
definite  case  of  each  colony  will  be  obvious 
without  being  repeatedly  laboured.  We 
shall  deal  first  with  the  important  group  of 
German  colonies  situated  in  Africa. 

Togoland,  the  smallest  of  the  German 
colonies  in  Africa,  is  in  some  respects  the 
most  successful.  It  comprises  some  33,700 
square  miles,  wedged  in  between  the  British 
Gold  Coast  Colony  and  the  French  possession 
of  Dahomey.  As  in  the  French  and  British 
East  African  colonies,  the  climate  of  the 
coast  is  unhealthy  for  Europeans.  It  is  not 
surprising,  therefore,  that  while  the  native 
population  amounts  to  about  1,000,000,  the 
European  settlers  number  only  some  368 
(320  Germans).  The  colony  produces  palm 
oil  and  kernels,  cotton,  rubber,  cocoa,  and 
tobacco,  the  imports  being  a  little  over  and 
the  exports  a  little  under  £500,000.  It  has 
been  excellently  administered  by  the  Germans ; 
the  roads  are  models  ;  the  natives  are  con- 
tented and  prosperous.     Alone  among  Ger- 


TOGOLAND   AND    KAMERUN  179 

man  colonies  it  pays  its  way  without  the  aid 
of  an  Imperial  subvention.  The  colony, 
whose  capital  fell  to  a  British  force  in  August 
1914,  is  undoubtedly  a  legitimate  prize  of  war 
according  to  generally  received  ideas  ;  but 
it  is  by  no  means  certain  that  British  interests 
would  not  be  served  by  the  continuance  of 
its  present  administration,  while  the  loss  of 
their  most  successful  colony  would  certainly 
be  a  bitter  blow  to  the  German  people.  It 
may  be  said  that  we  have  no  particular  call 
to  consider  the  feelings  of  our  enemies  ;  but 
as  a  friend  of  the  writer  remarked  in  discussing 
this  question,  ''It's  no  good  sitting  on  the 
safety  valve  when  the  boiler  is  at  bursting- 
point."  Even  if  we  regard  German  colonial 
expansion  as  partly  artificial,  it  might  prove 
in  the  long  run  a  dangerous  policy  to  aim  at 
its  entire  repression. 

Kamerun,  which  lies  between  Nigeria  and 
French  Congo,  is  a  plantation  colony  of  much 
larger  size.  Its  area  is  nearly  300,000  square 
miles,  including  a  large  district  ceded  by 
France  in  191 1  as  a  compensation  for  con- 
cessions in  Morocco,  and  the  native  inhabi- 
tants are  estimated  at  some  three  and  a  half 
millions.     The  whites  do  not  number  more 


l8o      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

than  about  1,870,  of  whom  over  1,600  are 
Germans.  Producing  cocoa,  rubber,  timber, 
ivory,  and  palm-oil,  its  exports  amount  to 
about  a  million  pounds  annually,  and  the  im- 
ports in  1912  exceeded  a  million  and  a  half. 
Cattle-rearing  is  carried  on  in  the  interior. 
The  expenditure  shows  an  excess  over  the 
local  revenue  of  some  £300,000,  which  is  met 
by  a  subsidy  from  the  Imperial  treasury. 
The  railway  and  telegraph  systems  are  at 
present  in  their  infancy.  The  natives  are 
said  to  be  less  contented  than  those  of  Togo- 
land,  and  it  is  suggested  that  some  of  them 
look  back  regretfully  to  the  days  when  the 
British  flag  flew  over  part  of  the  coast-line. 
The  reduction  of  the  Colony  is  being  under- 
taken by  a  joint  Anglo-French  force,  and  its 
fate  will  be  a  matter  for  discussion  between 
the  two  Governments.  Apart  from  the  possi- 
bility of  giving  effect  to  the  wishes  of  such 
of  the  inhabitants  as  genuinely  desire  British 
rule,  it  may  be  doubted  whether  we  have  any 
great  interest  in  undertaking  the  administra- 
tion of  this  vast  and  largely  undeveloped  area, 
and  the  same  remark  applies  to  the  position 
of  France. 

German  South-West  Africa  lies  farther  south, 


THE    GERMAN    COLONIES    IN    AFRICA. 

181 


l82      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

between  the  Portuguese  colony  of  Angola  and 
British  South  Africa.  It  is  a  large  but 
sparsely  populated  district  of  over  322,000 
square  miles,  with  a  sterile  coast,  but  posses- 
sing agricultural  and  pastoral  districts  the 
climate  of  which,  very  similar  to  that  of 
Bechuanaland,  is  suitable  for  European  settle- 
ment. In  fact,  there  are  over  12,000  Ger- 
mans in  the  colony,  besides  some  2,500  of 
other  white  races.  Its  record  is  stained  by 
the  treatment  of  the  natives,  the  Herrero  war 
having  resulted  in  a  reduction  of  the  native 
population  by  two- thirds.  The  present  figures 
are  generally  estimated  at  about  80,000. 

The  chief  industry  is  the  raising  of  live- 
stock, but  copper  is  mined  and  diamonds  have 
been  found  near  Luderitz  Bay.  The  exports  in 
1912  amounted  to  nearly  £2,000,000,  and  the 
imports  to  about  £1 ,600,000 .  The  expenditure 
has  to  be  met  mainly  by  an  Imperial  contribu- 
tion of  some  two  and  a  half  million  pounds. 

The  question  of  German  South- West  Africa 
is  complicated  by  its  position  with  regard  to 
the  South  African  Union.  At  an  early  period 
of  German  colonisation  there  was  a  party  in 
Germany  who  looked  to  the  development  of 
German  influence,  and  finally  of  German 
rule,   throughout  the  whole  of  Dutch  South 


GERMAN    SOUTH-WEST   AFRICA  183 

Africa.  They  regarded  the  Afrikanders  as  a 
Low  German  race  who  would  welcome  union 
with  Germany,  and  undoubtedly  German 
diplomacy  has  played  a  considerable  part  in 
South  African  politics.  Attempts  to  estab- 
lish themselves  at  Delagoa  Bay  in  Portuguese 
East  Africa  and  at  other  points  on  the  East 
Coast  were  frustrated  ;  but  there  has  existed 
a  strong  suspicion  that  the  railway  develop- 
ment of  German  West  Africa  has  not  been 
without  its  strategical  side.  In  point  of  fact, 
it  was  on  support  from  German  West  Africa 
that  the  rebellion  under  Maritz,  during  the 
present  war,  relied.  WThile  the  port  of 
Swakopmund  has  been  seized  from  the  sea, 
the  invasion  of  German  South- West  Africa  has 
been  entrusted  to  the  forces  of  the  South 
African  Union. 

Apart  from  the  actual  outbreaks  of  rebel- 
lion under  Maritz  and  De  Wet,  there  has  been 
considerable  lack  of  enthusiasm  among  a 
section  of  the  Dutch-speaking  inhabitants  of 
South  Africa  for  the  campaign  of  conquest ; 
but  General  Botha,  supported  by  the  majority 
of  the  people,  has  shown  firmness  and  energy 
in  carrying  out  the  task.  It  was,  no  doubt, 
the  desire  to  counter,  by  a  preventive  cam- 
paign, the  possibility  of  a  German  offensive 


184      COLONIAL    QUESTIONS    IN    THE    SETTLEMENT 

and  the  spread  of  German  intrigue,  which 
inspired  "  the  Imperial  Government's  request 
that  the  Union  should  take  certain  positions 
in  German  South- West  Africa.' '  1  If  these 
operations  are  successfully  carried  out  the 
right  of  the  South  African  Government  to 
full  consideration  of  their  desires  with  regard 
to  the  disposal  of  the  colony  cannot  be  re- 
sisted. General  Botha  has  plainly  stated 
that  "  the  Union  would  want  to  have  a  voice 
in  the  final  disposal  of  German  South- West 
Africa,"  1  and  the  claim  is  undoubtedly  just 
and  reasonable.  It  is  less  clear  how  the 
interests  of  the  Union  would  best  be  served. 
The  administration  of  the  colony  would  be 
a  severe  tax  upon  the  resources  of  the  Union, 
and  besides  adding  to  its  native  problem,  would 
introduce  a  German  element  that  might  prove 
difficult  of  assimilation.  It  might  possibly 
suit  the  Union  government  better  for  the  colony 
to  become  a  Crown  possession  ;  but  it  is  by 
no  means  certain  that  the  Imperial  authorities 
would  welcome  the  burden.  It  is  conceivable 
that  the  most  profitable  arrangement  would 
be  a  rectification  of  frontiers,  the  construction 
(if  necessary  as  a  British  concession)  of  rail- 

1  Speech  by  General  Botha,  reported  in  Times  of  Sep- 
tember 30,  1914. 


GERMAN    EAST   AFRICA  155 

ways  from  Walfisch  Bay  (a  good  harbour 
which  stands  in  a  little  British  enclave  on  the 
coast)  to  Cape  Town,  Johannesburg,  and  Bula- 
wayo,  and  a  Customs  Convention  which  would 
enable  that  port  to  become  an  outlet  for  the 
produce  of  the  Union  and  Rhodesia.  What- 
ever settlement  is  arrived  at  must  take  into 
account  both  the  undoubted  interests  of  the 
South  Africans  and  the  wider  questions  of 
Imperial  and  European  policy. 

German  East  Africa,  which  runs  between 
Portuguese  and  British  East  Africa  to  the  great 
lakes,  is  a  country  of  immense  commercial 
possibilities.  The  railway  running  from  the 
port  of  Dar-es-Salaam  to  Lake  Tanganyika, 
thus  connecting  the  coast  with  the  inland 
waterways,  will  tap  districts  of  vast  wealth, 
both  agricultural  and  mineral.  With  an  area 
of  about  384,000  square  miles  it  has  an  esti- 
mated native  population  of  over  seven  and  a 
half  millions,  but  the  white  inhabitants  do 
not  exceed  5,400,  of  whom  some  3,600  are 
Germans.  The  climate  does  not  offer  any 
insuperable  bar  to  white  settlement,  but  a 
great  part  of  the  most  suitable  land  is  in  the 
possession  of  native  landowners  and  the  area 
includes  two  considerable  native  States.     The 


l86      COLONIAL   QUESTIONS   IN    THE   SETTLEMENT 

products  include  sisal,  rubber,  coffee,  vanilla, 
cotton,  tobacco,  and  other  tropical  produce  ; 
there  are  vast  timber  forests  ;  and  minerals  of 
many  kinds  have  been  found,  including  coal, 
iron,  gold,  and  precious  stones.  The  exports 
in  1 91 2  were  over  a  million  and  a  half  and 
the  imports  over  two  millions  and  a  half. 
The  revenue  includes  a  subsidy  of  some 
two  millions. 

It  has  been  suggested  that  German  East 
Africa  might  be  handed  over  to  the  Indian 
Government  as  compensation  for  the  share 
taken  by  India  in  the  war,  and  that  it  might 
form  an  excellent  field  for  that  Indian  emi- 
gration which  is  so  little  encouraged  by  the 
white  Dominions.  The  objection  to  this 
course  seems  to  lie  in  the  fact  that  im- 
migration on  a  large  scale  could  only 
be  rendered  possible  by  dispossessing  the 
present  native  proprietors,  a  course  which 
would  be  equally  doubtful  from  the  points 
of  view  of  morality  and  practicability.  The 
same  objection  applies,  of  course,  to  the  idea 
of  white  immigration  on  a  large  scale, 
although  certain  districts  are  available  for 
settlement. 

The  chief  importance  of  the  colony,  from 
the  standpoint  of  Imperial  interests,  lies  in 


THE   ALL-RED   ROUTE  187 

the  fact  that  it  interposes  a  wedge  of  German 
territory  into  the  projected  "all-red  route" 
from  Egypt  to  South  Africa.  If,  however, 
the  British  Government  should  decide,  from 
reasons  of  policy,  against  annexation  of  the 
colony,  there  should  be  no  difficulty  in  com- 
ing to  a  working  arrangement  as  regards 
questions  of  transit  and  tariff.  Indeed,  it  is 
understood  that  some  arrangement  between 
Britain  and  Germany  with  regard  to  railway 
and  commercial  activities  in  Central  Africa 
had  been  concluded  shortly  before  the  out- 
break of  war.  It  is  probably  in  co-operation 
of  this  kind  that  the  best  hope  for  the  future 
development  of  the  Dark  Continent  is  to  be 
found. 

We  have  now  to  turn  to  the  German  pos- 
sessions in  the  Pacific  and  in  Asia. 

German  New  Guinea  and  the  scattered 
groups  of  islands  in  the  Pacific  are  of  much 
less  commercial  importance  than  the  African 
colonies.  Kaiser  Wilhelm's  Land,  which  lies 
to  the  north  of  the  British  territory  in  New 
Guinea,  has  an  area  of  about  70,000  square 
miles,  with  a  native  population  of  some 
450,000,  and  a  white  population  of  under  300. 


l88      COLONIAL   QUESTIONS   IN   THE    SETTLEMENT 

Tobacco,  cotton,  coffee,  and  the  coco-palm  are 
cultivated.  The  imports  in  191 2  amounted 
to  about  £460,000  and  the  exports  to 
£600,000. 

The  Bismarck  Archipelago,  the  Caroline, 
Pelew,  Solomon,  Marianne  and  Marshall  Is- 
lands, are  scattered  groups  with  a  total  area 
of  about  27,000  square  miles,  and  a  popula- 
tion of  some  300,000,  among  whom  are  a  few 
hundred  whites.  The  chief  product  of  the 
islands  is  copra. 

The  revenue  of  Kaiser  Wilhelm's  Land  and 
the  islands  is  supplemented  by  a  subvention 
of  some  £800,000. 

The  Samoan  Islands  of  Savaii  and  Upolu 
form  a  separate  colony  with  an  area  of  about 
1,000  square  miles  and  a  population  of  some 
500  whites  (300  Germans)  and  35,000 
coloured.  The  exports  (chiefly  copra  and 
cocoa  beans)  amounted  in  1912  to  over 
£250,000,  and  the  imports  (mainly  from 
Australia  and  New  Zealand)  to  about  the 
same  amount.  By  the  Convention  of  1899, 
dividing  the  Samoan  Islands  between  Ger- 
many and  the  United  States  (which  Powers 
had  previously  exercised  a  joint  protectorate 
with  Great  Britain),  all  three  nations  enjoy 
an  equality  of  trade  rights. 


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189 


I  go      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

On  the  whole  these  Pacific  colonies  are  well 
administered  by  Germany  and  the  treatment 
of  the  natives  is  good,  although  the  Germans 
have  not  succeeded  in  creating  any  particular 
feeling  of  loyalty. 

The  chief  value  of  the  islands  is  probably 
strategic ;  consisting  in  their  utility  as  coaling 
and  signal  stations  for  cruisers  operating  in 
the  Pacific.  The  reduction  of  these  colonies 
has  been  effected  mainly  by  the  forces  of  the 
Australian  Commonwealth  and  New  Zealand. 
It  is  well  known  that  the  Australians  are  in- 
clined to  set  up  something  of  an  equivalent 
to  the  Monroe  doctrine  as  regards  the  islands 
of  Australasia ;  and  the  ultimate  fate  of 
these  German  possessions  will  no  doubt  be 
decided  in  conference  with  the  Australian 
and  New  Zealand  Governments.  The  Aus- 
tralian people  have  in  the  past  keenly  re- 
sented what  seemed  to  them  to  be  the  laxity 
of  British  policy  in  the  Pacific,  and  they  will 
certainly  expect  a  voice  in  the  disposal  of  the 
colonies  which  have  been  reduced  by  their 
forces.  It  may  be  expected  that  the  Imperial 
authorities  will  give  full  weight  to  their  de- 
sires, and  that  the  Dominion  Governments, 
on  their  part,  will  take  into  consideration  the 
general  questions  of  Imperial  policy. 


KIAU-CHAU  iqi 

Kiau-chau,  a  district  in  the  Shantung 
Peninsula,  was  acquired  by  the  German 
Government  as  a  naval  base.  It  was  also 
destined  to  serve  as  a  centre  from  which  Ger- 
man influence  could  be  extended  in  the  obtain- 
ing of  commercial  concessions  and  political 
control.  Nominally  held  by  the  German 
Government  on  a  lease  of  ninety-nine  years 
from  China,  it  covers  some  200  square  miles, 
while  the  "sphere  of  interest"  extends  to 
some  2,750  square  miles.  It  includes  the 
strong  fortress  and  naval  harbour  of  Tsing-tau. 
The  Japanese  ultimatum  required  its  retro- 
cession to  China  ;  but  this  having  been  re- 
j  ected,  and  the  fortress  captured  by  a  J  apanese 
force  with  the  assistance  of  a  small  British 
contingent,  the  Japanese  Government  has 
intimated  that  it  considers  its  hands  are  free 
with  regard  to  the  disposal  of  the  leased  terri- 
tory. In  any  case  it  may  be  taken  for 
granted  that  it  will  not  come  again  under  the 
German  flag.  Its  fall  has  been  bitterly  re- 
sented in  Germany,  but  the  circumstances 
under  which  it  was  acquired  were  not  such  as 
to  give  any  moral  claim  to  its  possession. 

However  the  German  colonies  may  be  dis- 
posed of,  the  question  of  colonial  policy  will 


192      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

be  of  the  greatest  importance  in  the  future. 
If  we  are  to  look  forward  to  a  genuine  Euro- 
pean understanding,  into  which  even  Germany 
shall  in  time  frankly  enter,  we  must  give  no 
ground  for  the  suspicion  that  she  is  being 
shut  out  of  a  "  place  in  the  sun."  However 
unjust  may  be  the  allegations  of  land-grab- 
bing and  piracy  made  against  the  British 
Empire,  they  have  been  widely  and  firmly 
believed  in  other  countries  besides  Germany. 
The  German  people  feel  that  they  are  placed 
at  a  disadvantage  by  coming  late  into  the 
colonial  field,  and  it  is  our  part  to  show  that 
while  we  are  determined  to  maintain,  if 
necessary  by  force  of  arms,  the  integrity  of 
our  Empire,  we  have  no  desire  to  adopt  a 
dog-in-the-manger  attitude  with  respect  to 
other  portions  of  the  earth's  surface  or  to  use 
our  naval  supremacy  to  injure  or  confine  the 
legitimate  commercial  enterprise  of  other 
Powers. 

It  is  equally  essential  to  any  cordial  co- 
operation that  Germany  should  abandon  the 
practice  of  brandishing  her  "  mailed  fist " 
every  time  she  is  conducting  negotiations  for 
trading  stations  or  commercial  facilities. 
During  the  last  fifty  years  there  has  been  an 
unhappy  tendency  on  the  part  of  the  Powers 


CONCESSION   HUNTING   AND   POLICY  193 

generally  to  support  by  diplomatic  threats 
the  efforts  of  traders  and  financiers  to  obtain 
railway  or  mineral  concessions  in,  for  in- 
stance, China  or  Asiatic  Turkey.  In  this  way 
we  get  the  absurdity  of  great  nations  being 
brought  to  the  verge  of  war  by  differences 
over  a  concession  the  whole  value  of  which 
would  not  defray  the  cost  of  a  week's  opera- 
tions. In  truth  there  is  something  a  little 
grotesque  about  the  whole  system  of  backing 
tenders  by  bayonets  and  using  squadrons  as 
commercial  travellers.  In  the  long  run  a 
market  will  go  to  those  who  can  produce 
goods  suitable  to  that  market  at  prices  within 
the  means  of  the  buyers,  and  the  attempt  to 
employ  military  pressure  for  the  promotion 
of  trade  is  absolutely  uneconomic  and  anoma- 
lous. The  friction  caused  is  altogether  out 
of  proportion  to  the  commercial  advantages 
obtained  or  to  the  rewards  gained  in  other 
directions  from  legitimate  commerce.  This 
political  concession-hunting  may  bring  for- 
tunes to  individuals,  but  its  interference  with 
the  natural  laws  of  commercial  development 
is  injurious  both  to  the  general  trade  of  the 
country  concerned  and  to  the  commercial 
prosperity  of  the  world. 

It  is  true  that  fear  of  foreign  commercial 


194      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

penetration  is  often  complicated  by  the  fear 
that  commercial  influence  will  grow  into 
political  control.  But  this  fear  in  itself  is 
often  short-sighted  and  senseless.  It  is  to 
the  interest  of  the  entire  civilised  world  that 
as  large  a  proportion  of  the  earth's  surface  as 
possible  should  be  opened  up  for  commerce, 
that  communications  should  be  good  and 
secure,  that  order  should  be  maintained,  that 
the  civilisation  of  the  inhabitants  should  be 
advanced,  that  the  resources  of  the  territory 
should  be  developed.  Foreign  financiers  and 
foreign  traders  reap  immense  benefits  from 
the  work  of  policing  and  civilisation  which 
Great  Britain  has  done  in  India  and  Egypt. 
Were  Germany  or  Russia  to  do  a  similar  work 
in  Asia  Minor,  the  commerce  of  all  the  world, 
including  Great  Britain,  would  benefit.  It 
is  obvious  that  no  one  nation  can  undertake 
to  open  up  the  whole  undeveloped  surface  of 
the  globe  ;  and  it  is  eminently  desirable  that 
some  attempt  should  be  made  to  secure  agree- 
ment and  co-operation  in  the  carrying  on  of 
the  work.  It  is  earnestly  to  be  hoped  that 
the  policy  of  the  Open  Door  which  Britain 
has  adopted  in  her  Overseas  Dominions  may 
be  extended  to  the  colonial  possessions  and 
spheres  of  influence  of  all  the  Powers.     The 


THE    PROBLEM   OF   ASIATIC   TURKEY  I95 

adoption  of  a  policy  of  freedom  of  trade  (in 
the  larger  sense  of  the  word)  and  co-operation 
in  the  opening  up  of  undeveloped  territory  to 
commerce  would  undoubtedly  37ield  far  better 
results  to  the  trade  of  each  of  the  States 
concerned  than  a  continuation  of  the  policy 
of  exclusive  exploitation  and  rivalry.  It 
would  also  remove  a  very  constant  and  irri- 
tating source  of  international  friction. 

The  whole  question  may  be  rendered  some- 
what acute  by  the  possible  break-up  of 
Asiatic  Turkey.  Whether  the  Turk,  if  driven 
out  of  Europe,  will  be  able  to  maintain  his 
rule  in  Asia  may  be  a  doubtful  problem.  It 
is  certain  that  unless  he  shows  an  altogether 
new  and  unexpected  capacity  as  an  adminis- 
trator, the  commercial  future  of  his  Asiatic 
dominions  will  lie  in  their  penetration  by 
Europeans.  It  is  at  least  possible  that  his 
political  incompetence  may  result  in  a  total 
break-up  of  even  his  Asiatic  Empire.  In 
that  case,  unless  the  situation  is  wisely  handled 
by  the  European  Governments,  we  may  wit- 
ness the  same  undignified  scramble  for  terri- 
tory and  spheres  of  influence  as  marked  the 
colonisation  of  Africa.  The  only  way  to 
avert  such  a  scramble,  with  all  its  attendant 
friction,  would  be  an  equitable  and  friendly 


196      COLONIAL   QUESTIONS   IN   THE   SETTLEMENT 

agreement  by  the  Powers  for  the  protection 
of  their  joint  and  several  interests. 

It  is  probable  that  the  Russo-Turkish  cam- 
paign in  the  Caucasus  will  end  by  a  Russian 
occupation  of  Armenia,  and  there  can  be  no 
doubt  that  such  a  change  would  be  to  the 
benefit  of  the  Armenian  portion  of  the  popu- 
lation. In  Asia  Minor  itself  is  the  real  home 
of  the  Turkish  race,  and  here  if  anywhere 
an  independent  Turkey  may  be  preserved 
without  injury  to  the  peace  of  the  world. 
But  it  is  equally  doubtful  whether  the  Turk 
if  expelled  from  Constantinople  will  be 
able  to  maintain  his  control  of  Arabia  and 
whether  the  Arab  national  movement  is 
really  sufficiently  advanced  to  be  capable  of 
establishing  an  organised  government.  France 
has  large  interests  in  Syria  and  Italy  in 
Cilicia ;  Smyrna  is  largely  a  Greek  city. 
The  idea  of  an  independent  Jewish  Palestine 
presents  many  attractive  features  and  might 
go  far  to  solve  the  problems  of  Jewish 
nationalism  in  other  countries.  Moreover,  it 
must  be  remembered  that  unless  we  are  to 
imagine  that  Germany  can  be  permanently 
excluded  from  the  European  system  and  the 
life  of  the  world — an  idea  too  preposterous  to 
be   refuted — her   interests   will   have   to   be 


TURKISH 
DOMINIONS 

Miles 

200        300         400 


TURKEY    IN    ASIA. 

197 


I98      COLONIAL   QUESTIONS    IN   THE    SETTLEMENT 

considered,  and  that  these  are  of  consider- 
able magnitude  in  Asia  Minor  and  Mesopo- 
tamia. It  has  even  been  suggested  that  in 
this  region  Germany  may  find  a  field  for 
emigrants  who  would  not  be  lost  to  the 
Fatherland.  Dr.  J.  Holland  Rose,  who  can- 
not be  suspected  of  pro-Germanism,  writes  : 

The  enlarged  and  strengthened  Areopagus  of  the 
nations  must  and  will  discuss  such  questions  as  the 
excessive  pressure  of  the  population  in  one  State,  and 
it  will  seek  to  direct  the  surplus  to  waste  or  ill-cultivated 
lands.  In  that  more  intelligent  and  peaceful  future 
Germans  will  not  need  to  "  hack  their  way  through." 
The  fiat  of  mankind  will,  I  hope,  go  forth  that  they  shall 
acquire,  if  need  be,  parts  of  Asia  Minor,  Mesopotamia, 
and  South  Brazil.1 

It  is  true  that  the  problem  is  complicated 
for  us  by  the  strategical  considerations  in- 
volved in  our  protectorate  of  Egypt  and 
the  preservation  of  our  sea  route  to  India, 
and  by  our  obligations,  as  the  greatest 
Moslem  Power,  to  provide  for  the  security  of 
the  Holy  Places  and  the  routes  of  pilgrim- 
age. It  must  be  remembered,  however,  that 
a  Russian  occupation  of  Constantinople  and 

1  The  Origin  of  the  War,  p.  188.  Dr.  Holland  Rose's 
suggestion  with  regard  to  Brazil  raises  very  difficult  and 
delicate  points.  It  is  at  least  doubtful  also  whether  the 
German  colonists  in  Brazil  would  welcome  political  union 
with  Germany. 


AN   ALL-ROUND   AGREEMENT  199 

the  strengthening  of  the  Balkan  States  would 
go  a  long  way  towards  removing  such  appre- 
hensions as  were  originally  excited  by  the 
Bagdad  Railway  scheme. 

The  fact  that  the  whole  problem  may  prove 
somewhat  complex  and  difficult  is  all  the 
more  reason  why  a  real  attempt  should  be 
made  to  settle  it  by  agreement  and  to  avoid 
the  friction  arising  from  a  policy  of  pin- 
pricks. 

It  may  not  be  possible  at  the  end  of  the 
war  to  secure  an  all-round  agreement  on  ques- 
tions of  colonisation  and  spheres  of  influence 
similar  to  that  by  which  France  and  Britain 
settled  the  apparent  conflict  of  their  interests 
in  Africa.  It  is  possible  that  a  beginning 
might  be  made,  and  it  is  very  much  to  be 
hoped  that  it  will  be  attempted.  The  adop- 
tion of  such  a  policy  would  not  merely  be  of 
good  augury  for  the  development  of  world 
commerce  and  civilisation,  but  would  go  far 
to  remove  possible  causes  of  conflict  and  to 
pave  the  way  for  a  genuine  European  under- 
standing. 

Note. — The  proclamation  of  the  British  Protectorate  over 
Egypt  does  not  seem  to  call  for  discussion  among  the 
problems  of  the  settlement.  Its  sole  effect  is  to  regularise 
an  already  existing  situation,  and  it  involves  no  real  change 
either  in  the  internal  or  the  international  position. 


CHAPTER    VI 

THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

It  was  said  in  the  first  chapter  that  as  a 
general  rule  wars  are  waged  either  for  the 
assertion  of  national  superiority  or  in  pursuit 
of  a  supposed  opportunity  for  material  gain. 
The  annexation  of  alien  provinces  is  prompted 
either  by  the  desire  for  political  power,  which 
springs  from  belief  in  the  inherent  rivalry  of 
nations,  or  by  a  supposed  opportunity  of 
adding  to  national  wealth  and  prosperity. 
We  have  already  dealt  with  the  former  of 
these  motives.  We  have  seen  that  the 
acquisition  of  territory  inhabited  by  people 
of  alien  nationality  results  both  in  the  crea- 
tion of  a  centre  of  unrest  within  the  State  and 
in  the  multiplication  of  causes  of  conflict  with 
other  nations.  The  question  of  material 
advantage  remains  to  be  considered. 

The  belief  in  the  material  advantages  of 
conquest  dates  from  days  when  it  was  still 


THE    ECONOMICS   OF   CONQUEST  201 

possible  to  exact  in  one  form  or  another 
tribute  from  a  conquered  country  and  to 
divert  the  profits  derived  from  the  develop- 
ment of  its  resources  to  the  exclusive  benefit 
of  the  conqueror.  Even  in  times  when  the 
economic  development  of  the  world  was 
comparatively  rudimentary,  this  policy  was 
usually  attended,  in  the  long  run,  with  fatal 
results  to  the  prosperity  of  the  conquering 
State  ;  but  in  modern  times  the  complexity 
of  commerce  and  the  greater  rapidity  of 
economic  reactions  have  much  increased 
the  danger  and  difficulty  of  such  an  ex- 
ploitation of  conquered  territory  and  have 
rendered  its  ill  effects  more  rapidly  felt  and 
more  easily  demonstrated.  It  has  become 
an  axiom  of  practical  statesmen  that  the 
local  revenues  of  conquered  territory  must 
be  applied  for  purposes  of  local  development. 

The  principle  that  local  revenues  should  be  expended 
locally  has  become  part  of  the  political  creed  of  English- 
men.1 

The  trade  figures  of  conquered  provinces 
do  indeed  go  to  swell  the  returns  of  the  con- 
quering States,  but  these  totals  reflect  only 
the   increased   area   and   population   of   the 

1  Political  and  Likrary  Essays,  1908-1913,  the  Earl  of 
Cromer,  p.  22. 


202   THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

State  and  do  not  imply  greater  prosperity 
or  improved  conditions  of  life  for  its  people. 
It  is  true  that  the  transfer  of  territory  from 
one  government  to  another  involves  the  trans- 
fer of  such  proportion  of  local  taxation  as  is 
devoted  to  armament,  and  thus  increases  the 
power  of  the  conquering  State  to  provide 
material  of  war  as  well  as  adding  to  the  popu- 
lation from  which  its  troops  are  raised.  This, 
however,  is  a  political  and  not  an  economic 
consideration.  The  degree  of  value  to  be 
attached  to  such  transfer  depends  upon  the 
acceptance  or  non-acceptance  of  the  theory 
of  the  necessary  rivalry  of  States  and  of  domi- 
nation as  the  end  of  government.  It  is  subject, 
of  course,  to  the  criticisms  already  passed  upon 
this  theory.  While  it  adds  to  the  military 
power  of  the  victorious  State  it  increases  the 
risk  of  war  and  creates  a  centre  of  disaffection 
which  may  become  a  grave  source  of  political 
embarrassment.  With  this  exception,  the 
revenues  of  conquered  territories  cannot  be 
assumed  to  provide  a  surplus  which  can  be 
drawn  upon  for  the  purposes  of  the  central 
government  over  and  above  the  increased 
expenditure  rendered  necessary  by  the  ad- 
ministration of  the  annexed  territories.  Nor 
can  it  be  said  that  the  political  control  of 


RAW    MATERIALS   AND    EXPLOITATION  2CV} 

districts  producing  raw  material  represents 
new  sources  of  supply  available  for  the  manu- 
factures of  the  dominant  race.  Every  manu- 
facturing nation  imports  large  quantities  of 
raw  material  from  territories  over  which  it 
has  no  control,  which  may  indeed  be  situ- 
ated within  the  frontiers  of  States  politi- 
cally hostile ;  nor  would  the  political  control 
of  these  territories  enable  such  materials  to 
be  acquired  without  payment.  This  is  not 
the  place  for  a  detailed  examination  of  the 
complex  question  of  the  exploitation  of  natural 
wealth  in  backward  countries.  It  is  possible, 
however,  to  say  at  least  that  the  difficulties 
of  any  attempt  at  exclusive  exploitation  are 
so  far  recognised  that  export  duties  on  raw 
materials  are  practically  unknown  even  in 
highly  protected  States.  The  only  method 
by  which  the  raw  materials  of  annexed  terri- 
tories could  be  made  a  source  of  revenue  to 
the  conquering  State  would  be  their  confisca- 
tion by  the  Government,  but  State  working  of 
iron  mines  or  coal  mines  is  not  likely  to  be 
commercially  advantageous,  and  the  adop- 
tion of  such  a  step  in  conquered  territories 
would  probably  lead  to  trouble  with  private 
owners  in  the  conquering  country.  Perhaps 
the  only  definite  material  advantage  which 


204   THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

can  be  gained  from  the  annexation  of  terri- 
tory is  the  inclusion  of  the  new  provinces 
within  the  fiscal  zone  of  the  State,  and  a 
consequent  extension  of  the  Free  Trade 
market  ;  but  even  this  gain  must  be  weighed 
in  the  balance  against  the  increased  burden  of 
armament  expenditure  and  of  war  risks  which 
the  possession  of  conquered  territory  in- 
volves. Questions  of  fiscal  arrangement,  the 
free  navigation  of  rivers,  etc.,  can  generally 
be  settled  both  better  and  more  cheaply  by 
negotiation  and  bargaining  than  by  wars  of 
conquest,  and  they  can  seldom  be  settled  by 
the  forcible  transfer  of  territory  without 
involving  counter-balancing  disadvantages 
which  outweigh  the  profit.  In  the  whole 
question  of  territorial  rearrangement  the 
material  gains  are  so  limited  and  problematical 
and  the  political  considerations  so  prepon- 
derant, that  economic  interests  can  hardly 
be  held  to  interfere  with  the  working  of 
those  principles  of  nationality  and  consent 
which  have  been  discussed  in  the  previous 
chapters. 

It  is  these  considerations  which  render  a 
territorial  "  compensation  "—to  Belgium,  for 
instance — so  largely  illusory  in  the  financial 
sense,  leaving  the  question  to  be  settled  upon 


THE   VALUE   OF   COLONIES  205 

those  considerations  of  political  desirability 
which  have  already  been  discussed. 

In  the  case  of  the  break-up  of  a  great  arti- 
ficial Empire  like  that  of  Austria-Hungary, 
where  very  large  territories  are  involved,  the 
economic  ties  between  the  separated  areas  and 
the  remaining  portion  of  the  Empire  will 
generally  involve  considerations  of  mutual 
interest  which  will  express  themselves  in  the 
fiscal  arrangements  following  the  redistribu- 
tion of  territory. 

To  a  large  extent  the  considerations  which 
apply  to  the  redistribution  of  territory  in 
Europe  apply  also  to  colonial  possessions. 
The  practice  of  exclusive  exploitation  which, 
in  the  case  of  the  Spanish  colonial  empire, 
proved  ruinous  alike  to  the  colonies  and  to 
the  mother  country,  would  be  to-day  more 
than  ever  disastrous.  The  existence  of  great 
national  overseas  communities  will  always 
afford  an  accessible  and  desirable  market 
whether  politically  united  to  the  mother 
country,  as  in  the  case  of  the  British 
Dominions,  or  politically  severed,  as  in  the 
case  of  the  great  German  communities  in 
North  and  South  America.  In  the  case  of 
tropical  colonies  unsuitable  for  European 
settlements  it  is  true  that  trade  generally 
15 


206   THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

follows  investment  and  the  development  of 
communications,  and  that  investment  and 
communications  show  a  tendency  to  follow 
the  flag.  It  is  less  certain,  when  once  invest- 
ment on  any  considerable  scale  has  taken  place 
and  communications  have  been  set  up  by  the 
establishment  of  steamer  lines,  etc.,  how  far 
the  transfer  of  political  control  would  involve 
the  transfer  of  the  trade  already  created. 

In  the  later  stages  of  development  of 
colonies  where  there  is  no  great  white  popula- 
tion, it  is  probable  that  their  prosperity  can 
only  be  ensured  by  allowing  trade  complete 
freedom  to  follow  the  natural  laws  of  demand 
and  supply.  It  is  true  that  political  control 
produces  an  opportunity  for  the  obtaining 
by  individuals  of  valuable  concessions,  but 
the  benefits  of  these  concessions  are  derived 
rather  by  the  small  group  immediately  con- 
cerned than  by  the  trade  of  the  country  as  a 
whole.  For  all  exporting  nations  the  supreme 
commercial  interest  in  these  undeveloped 
districts  is  their  opening  up  to  trade,  the 
maintenance  of  order  and  the  improvement  of 
communications.  So  long  as  this  work  is 
efficiently  performed  it  is  a  matter  of  com- 
parative indifference  by  whom  it  is  carried 
out.     It  can  hardly  be   said   to  be  to   the 


THE   POLICY   OF   THE   OPEN    DOOR  20y 

interest  of  any  single  country  to  undertake 
the  whole  burden  of  such  development. 
British  interests  in  particular  are  better 
served  by  the  creation  or  preservation  of  such 
friendly  relations  with  other  States  as  will  en- 
sure the  guidance  of  their  colonial  policy  by 
the  principle  of  the  "  open  door  " — a  principle 
which  experience  shows  to  be  essential  to  the 
prosperity  of  the  colonies  themselves — than 
by  a  further  addition  to  the  gigantic  extent 
of  the  Overseas  Dominions. 

It  would  be  idle,  of  course,  to  deny  the 
benefits  which  result  to  British  trade  from 
the  political  connection  with  India  ;  but  a 
careful  study  of  Indian  history  will  show  that 
our  Indian  trade  has  been  built  up  by  com- 
mercial enterprise  rather  than  by  the  exer- 
cise of  military  power.  It  has  been  a  case  of 
the  flag  following  trade  for  the  protection  of 
our  merchants  in  disturbed  provinces,  rather 
than  of  trade  following  the  flag  as  a  result 
of  conquest.  And  the  whole  history  of 
Indian  development  goes  to  prove  the  superi- 
ority of  a  liberal  system  of  colonial  policy  as 
against  that  idea  of  exclusive  exploitation 
which  is  the  ideal  of  exponents  of  the  domina- 
tion theory  and  which  dragged  Spain  and 
her  colonies  alike  to  ruin. 


208      THE  ECONOMIC  FACTORS  OF  THE   SETTLEMENT 

The  whole  question  of  colonial  posses- 
sions and  spheres  of  influence  has  been  dealt 
with  in  the  last  chapter  on  lines  of  general 
principle,  'and  the  considerations  involved 
in  those  principles  will  outweigh  in  most 
cases  the  economic  argument.  Whether  or 
no  political  considerations  involve  the  an- 
nexation of  any  of  the  German  colonies,  the 
idea  that  this  annexation  can  be  set  off  in 
terms  of  capital  value  against  the  cost  of  the 
war  involves  a  flat  contradiction  of  the  out- 
standing facts  of  economics  and  of  colonial 
experience. 

We  have  now  to  turn  from  the  considera- 
tion of  the  economic  side  of  those  questions 
involving  transfer  of  territory,  the  political 
aspects  of  which  have  been  dealt  with  in 
previous  chapters,  to  a  discussion  of  the 
purely  financial  problems  of  the  settlement. 
By  far  the  most  important  of  these  is,  of 
course,  the  question  of  indemnities.  The 
subject  is  a  complex  and  a  difficult  one,  but 
no  discussion  of  the  settlement  would  be 
complete  which  did  not  involve  some  con- 
sideration of  the  arguments  for  and  against 
the  possibility  and  desirability  of  exacting 
indemnities  in  the  event  of  victory. 

The  imposition  of  a  war  indemnity  may  be 


THE    MOTIVES   OF   AN    INDEMNITY  209 

prompted  by  five  distinct  motives.     It  may 
be  designed  : 

(a)  To  enrich  the  victor  ;  that  is  to  say, 
to  enable  him  to  make  a  profit  out  of  his 
victory ; 

(b)  To  inflict  upon  the  vanquished  an  ade- 
quate punishment  for  his  act  of  aggression  ; 

(c)  To  recoup  the  conqueror  for  the  cost 
of  the  war  ; 

(d)  To  make  good  the  damage  done  to  the 
prosperity  of  the  subjects  of  the  conquering 
State  ; 

(e)  To  impoverish  the  vanquished  State, 
not  as  a  matter  of  punishment,  but  with  a 
view  to  impairing  his  power  for  renewed  mili- 
tary or  commercial  aggression. 

In  the  case  of  the  present  war  it  docs  not 
appear  to  be  necessary  to  discuss  at  length 
the  question  of  an  indemnity  imposed  for  either 
of  the  first  two  motives.  Even  if  it  were 
possible  to  exact  an  indemnity  of  such  size 
that  it  would  not  only  repay  the  cost  of  the 
war  to  the  Allies  but  leave  them  a  substantial 
margin  of  profit,  it  is  hardly  conceivable  that 
they  would  make  the  attempt.  The  Allied 
Governments  have  repeatedly  stated  that 
their  object  in  this  war  is  not  to  enrich  the 
Allied  Powers,  and  the  whole  notion  of  waging 


210      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

war  for  the  purpose  of  profit  would  be  repug- 
nant alike  to  the  feelings  of  the  Allied  Peoples 
and  to  the  principles  upon  which  they  have 
based  their  cause.  The  crude  idea  of  punish- 
ment by  the  infliction  of  an  indemnity  is 
equally  alien  to  the  spirit  in  which  the  war 
is  being  waged  by  the  Allies.  It  is  not  im- 
possible that  their  demands  at  the  end  of  the 
war  might  include  an  inquiry  into  allegations 
of  outrage  upon  the  civilian  populations  of 
France  and  Belgium  and  breaches  of  the  laws 
of  war,  to  be  followed  by  the  punishment  of 
the  responsible  parties  ;  but  it  is  obvious 
that  the  infliction  of  punishment  upon  a  whole 
nation,  either  for  the  acts  of  its  Government 
or  for  the  misconduct  of  some  of  its  soldiers, 
by  the  imposition  of  a  crushing  indemnity, 
would  result  in  the  burden  falling  in  the 
main  not  only  upon  those  least  able  to  bear 
it,  but  upon  those  who  were  most  free  from 
responsibility.  Moreover,  the  object  of  the 
Allies,  which  is  to  attain  a  more  secure  Euro- 
pean society,  is  to  be  achieved  not  so  much 
by  the  imposition  of  vindictive  punishment 
as  by  the  adoption  of  a  policy  which  will  give 
to  the  Germans  themselves  an  opportunity 
and  a  motive  for  reforming  the  abuses  of 
their  Government. 


CAN    THE   ALLIES   RECOUP   THEIR   EXPENSES  ?      211 

It  would  seem,  however,  that  a  victor  who 
is  confident  of  the  justice  of  his  cause  might 
legitimately  employ  the  imposition  of  an 
indemnity  for  any  of  the  other  three  objects 
mentioned  above,  if  it  should  prove  that 
they  could  be  best  obtained  by  these  means. 
It  will,  therefore,  be  desirable  to  consider 
briefly  how  far  it  is  possible  to  secure  an 
indemnity  from  the  defeated  Powers  for 
the  achievement  of  any  one  of  these  ends  ; 
and  whether  it  can  be  effected  without  in- 
volving disadvantages  which  would  outweigh 
the  benefits  to  be  derived  from  it. 

First,  can  the  Allies  hope  to  exact  an  in- 
demnity that  will  recoup  them  for  the  cost 
of  the  war  ? 

It  is  obviously  impossible  to  estimate  with 
any  approach  to  accuracy  what  the  cost 
of  the  war  will  be.  In  order  to  take  a 
strictly  reasonable  figure,  we  will  assume  that 
the  war  does  not  extend  beyond  twelve 
months  from  its  commencement.  This  is, 
of  course,  the  purest  assumption  and  very 
probably  the  period  may  be  largely  ex- 
ceeded, but  it  will  give  at  least  some  data 
from  which  conclusions  may  be  drawn,  and 
it  will  be  sufficient  to  bear  in  mind  that  the 
prolongation  of  the  war  beyond  that  period 


212      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

would  add  possibly  more  than  proportionately 
to  its  cost. 

Taking  as  a  basis  the  figures  given  by  Mr. 
Lloyd  George  for  the  year  ending  Decem- 
ber 31  next,  we  may  take  the  Allies'  expendi- 
ture in  the  course  of  twelve  months  of  war  as 
about    £2,000,000,000.     This,    of    course,    is 
only   the   direct  war  expenditure,  and  that 
direct  expenditure  does  not  represent  any- 
thing like  the  real  burden.     To  cover  that  we 
should  have  to  take  into  account  the  stop- 
page of  trade,  the  destruction  of  property, 
the  diversion  of  energy  from  productive  pur- 
suits to  the  fighting  line,  and  to  the  prepara- 
tion of  the  material  of  war,  the  loss  to  the 
States  of  the  productive  power  of  those  killed 
and  disabled  during  the  war,  and  the  losses 
attendant   upon   the   general   dislocation   of 
finance.     Against  these  it  would  be  neces- 
sary to  put  certain  savings  due  to  the  cutting 
down  of  items  of  wasteful  expenditure,  but 
there   is   no  question  that   the   total   figure 
would  be  gigantic.     It  is  better,  however,  not 
to  involve  ourselves  in  an  attempt  to  estimate 
it,  but  to  remain  content  with  the  figure  of 
two  thousand  millions  which  would  represent 
merely  the  direct  cost  of  the  war. 
The  first  question  we  have  to  ask  is  whether 


COULD   WE   GET  £2,000,000,000  ?  213 

it  would  be  possible  for  Germany  and  Austria 
to  pay  such  a  sum.  If  these  Powers  are  com- 
pelled to  sue  for  peace  from  sheer  exhaustion, 
it  may  be  assumed  that  every  source  of 
revenue  will  previously  have  been  drained  dry 
and  every  revenue-raising  device  strained  to 
the  uttermost.  The  longer  the  war  con- 
tinues before  the  Will  to  Resist  of  these 
States  is  broken  down,  the  more  complete 
will  be  the  exhaustion  of  their  financial 
resources.  By  the  manipulation  of  loans 
and  the  issue  of  inconvertible  paper  money 
their  governments  will  not  only  have  made 
great  inroads  upon  the  existing  wealth  of  the 
States,  but  will  have  anticipated  for  war 
purposes  the  production  of  the  future.  The 
Allies,  following  in  the  tracks  of  the  German 
tax  collectors  who,  ex  hypothcsi,  have  adopted 
every  means  known  to  them  of  raising  revenue 
for  the  purposes  of  war,  will  not  be  able  to 
improve  on  their  work.  On  the  other  hand, 
if  we  suppose  the  war  to  end  before  the  point 
of  financial  exhaustion  is  reached  by  Ger- 
many, it  will  be  a  question  for  very  serious 
consideration  as  to  whether  it  would  be 
worth  while  to  press  for  an  indemnity  as  one 
of  the  conditions  of  peace.  On  this  assump- 
tion,   that    through   purely    military    means 


214      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

Germany  is  induced  to  sue  for  peace  before 
her  financial  resources  are  exhausted,  the 
Allies  would  be  faced  by  two  considerations  : 
first,  they  would  have  to  recognise  that  by 
prolonging  the  war  for  the  sake  of  an  in- 
demnity they  would  be  sacrificing  the  lives 
of  their  citizens,  the  value  of  which  cannot  be 
calculated,  for  a  purely  material  gain ;  and, 
secondly,  that  every  month  of  warfare  would 
render  the  proportion  of  the  sum  which  could 
be  extracted  from  Germany  to  the  total  of 
the  Allies'  expenditure  less  adequate. 

For  these  reasons  it  seems  unlikely  that  a 
capital  levy  of  any  magnitude  can  be  imposed 
on  the  defeated  nations.  It  would  almost 
certainly  be  impossible  to  raise  in  this  way 
any  sum  comparable  to  the  cost  of  the  war. 
The  great  indemnity  could  only  be  obtained 
by  instalments  covering  a  period  of,  say, 
twenty  years.  It  would  have  to  be  provided 
also  that  the  annual  payments  should  be 
graduated  so  as  to  keep  pace  with  the 
economic  recovery  of  the  defeated  nations. 
The  payments  to  be  made  in  the  first  few 
years  after  the  war  would  necessarily  be 
small,  being  gradually  increased  as  finance 
and  industry  recovered  their  normal  con- 
dition. 


AN    INDEMNITY   BY   INSTALMENTS  215 

There  does  not  seem  to  be  any  inherent  im- 
possibility in  an  indemnity  of  two  thousand 
millions  being  raised  in  this  way.  It  would 
probably  be  possible  indeed  to  exact  a  much 
larger  sum.  We  must,  however,  face  the 
fact  that  the  question  of  its  desirability  is 
governed  by  other  than  purely  financial  con- 
siderations. The  spreading  of  payment  over 
a  considerable  term  of  years,  which  would  be 
necessary  to  its  financial  possibility,  would 
keep  alive  among  the  population  of  the  de- 
feated countries  the  passions  aroused  by  the 
war,  and  would  go  far  towards  preventing  any 
possibility  of  a  reconciliation  between  the 
belligerents  or  the  formation  of  that  general 
European  understanding  which  seems  to  be 
the  only  possible  security  for  permanent  peace. 
Moreover,  such  a  plan  would  certainly  in- 
volve a  demand  for  some  security  to  be  given 
by  Germany  for  the  due  payment  of  the  in- 
stalments. The  most  obvious  course  would 
be  to  occupy  certain  German  fortresses  and 
districts  until  payment  should  be  completed. 
Such  occupation,  however,  would  probably 
form  an  insuperable  obstacle  not  merely  to 
any  possibility  of  reconciliation,  but  to  any 
satisfactory  readjustment  of  the  political 
system  in  Europe,  and  the  situation  of  the 


2l6   THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

army  of  occupation  might  well  become  in- 
tolerable, as  it  did  in  the  case  of  France  after 
1 815.  A  very  much  more  practicable  sug- 
gestion is  that  the  German  colonies  should  be 
retained  as  pledges  to  be  restored  as  and 
when  the  instalments  were  paid.  The  point 
which  has  here  to  be  considered  is  how  far 
these  colonies  would  form  a  genuine  equiva- 
lent for  the  financial  loss  if  Germany  should 
make  default  in  her  payments,  in  the  hope  of 
recovering  the  colonies  by  arms  at  some 
future  time.  For  a  part,  at  least,  of  the 
indemnity  it  might  be  possible  to  obtain 
something  in  the  nature  of  a  banker's  guaran- 
tee which  would  pledge  the  credit  of  German 
finance  for  due  performance  of  the  obligations 
undertaken.  The  extent  to  which  this  will 
be  possible  must  depend,  of  course,  upon  the 
size  of  the  indemnity  on  the  one  hand  and 
the  financial  position  of  Germany  at  the  close 
of  the  war  on  the  other. 

A  consideration  which  will  carry  great 
weight  in  financial  circles  and  will  operate 
against  the  imposition  of  an  indemnity  of 
great  magnitude,  even  though  payment  may 
be  extended  over  a  considerable  period,  is 
that  the  prime  necessity  of  world  commerce 
after  the  great  upheaval  of  the  war  will  be 


THE   ATTITUDE   OF   BUSINESS   MEN  217 

a  period  of  rest  and  recuperation.  Business 
men,  who  are  above  all  things  anxious  to 
see  trade  flowing  again  in  its  normal  channels 
and  to  reforge  the  links  which  have  been 
shattered,  will  not  be  disposed  to  look  very 
favourably  upon  a  financial  operation  which, 
though  it  might  relieve  taxation,  would  cer- 
tainly not  make  for  tranquillity  in  the  money 
markets.  It  therefore  becomes  a  question 
whether  the  best  business  interests  in  the 
Allied  Countries  will  not  be  disposed  rather  to 
discourage  their  Governments  from  demand- 
ing any  very  large  financial  contribution  from 
the  vanquished  States,  and  be  willing  to 
forgo  that  compensation  for  damage  done 
to  individual  interests  which  must  in  any 
case  be  so  inadequate. 

It  is  true  that  the  indemnity  imposed 
upon  France  by  Germany  in  1871  was  paid 
off  in  twenty-seven  months  from  the  date 
of  the  first  payment,  and  the  transaction 
was  therefore  free  from  the  complications 
attendant  upon  the  system  of  extended  in- 
stalments. We  must,  however,  take  into 
consideration  that  the  amount  of  an  in- 
demnity which  would  compensate  the  Allies 
to  any  substantial  degree  for  the  expenses  of 
the  war  would  be  very  much   greater  than 


2l8      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

that  of  the  Franco-German  indemnity,  and 
that  the  conditions  in  Germany  would 
be  altogether  different  from  those  which 
obtained  in  France.  The  whole  financial 
position  of  France  was  based  in  1870  on  the 
fact  that  every  peasant  was  a  small  capitalist. 
The  French  are  a  thrifty  nation  with  small 
families.  They  have  become  a  nation  of 
investors,  and  at  the  time  when  the  indemnity 
was  imposed  upon  them  the  extent  of  the 
national  reserves  of  capital  was  displayed  in 
the  remarkable  response  to  the  new  loans 
by  which  the  £200,000,000  were  paid  off. 
The  Germans,  on  the  contrary,  are  a  nation 
of  borrowers,  with  capacities  for  production 
and  distribution  which  enable  them  to  take 
their  place  in  the  front  rank  of  commercial 
nations,  but  without  great  capital  reserves. 
It  would  almost  certainly  be  impossible  for 
them  to  raise  within  the  country  anything 
like  the  sum  which  would  be  required. 

Neither  is  the  prospect  of  the  defeated 
nations  being  able  to  float  a  loan  in  neutral 
countries  for  the  purpose  of  raising  funds 
wherewith  to  discharge  the  indemnity  at  once 
very  promising.  The  only  neutral  country 
capable  of  subscribing  to  such  a  loan  is 
America,  and  even  there  capital  is  likely  to 


AN   INDEMNITY   LOAN  2I9 

be  much  too  scarce  for  any  to  be  available 
for  the  great  indemnity  loan.  The  surplus 
capital  of  the  world  will  be  badly  needed  at 
the  end  of  the  war  for  the  purpose  of  restor- 
ing the  position  of  industry  and  commerce, 
and  the  raising  of  an  immense  indemnity  loan 
in  America  is  neither  probable  nor — from  the 
Allies'  point  of  view — desirable.  Such  a  loan 
would  necessarily  compete  with  the  require- 
ments of  British  traders  in  the  money  markets 
of  the  world.  It  is  true  that  the  British 
Government  would  receive  the  money  with- 
out the  payment  of  interest  ;  yet  it  may  be 
doubted  whether  this  advantage  would 
counterbalance  the  effect  of  its  diversion  from 
those  channels  into  which  it  would  naturally 
have  been  attracted — the  channels,  that  is 
to  say,  by  which  it  would  have  been  distri- 
buted where  the  need  of  capital  was  greatest. 
With  all  its  drawbacks  the  gradual  payment 
system  would  probably  be  the  only  method 
by  which  such  an  indemnity  could  be  paid, 
and  the  greater  the  amount  of  the  indemnity, 
the  longer  would  be  the  period  of  payment 
with  its  attendant  disadvantages. 

It  must  still  be  considered,  however,  how 
far  it  may  be  possible  to  exact  an  indemnity 
which  would  relieve  the  Allies  of  some  sub- 


220      THE  ECONOMIC  FACTORS  OF  THE   SETTLEMENT 

stantial  part  of  the  cost  of  the  war  without 
incurring  those  disadvantages  which  would 
attend  upon  any  attempt  by  the  Allies  to 
recoup  themselves  for  their  whole  expendi- 
ture. To  answer  this  question  fully  will 
require  a  most  careful  study  of  the  conditions 
which  actually  exist  when  peace  is  made.  It 
would  appear  that  whatever  may  be  the  total 
amount  of  the  indemnity  demanded,  the  in- 
stalments which  could  be  paid  during  the 
first  few  years  after  the  war  must  almost 
certainly  be  small.  It  does  not  seem  likely 
that  any  indemnity  sufficiently  substantial 
to  be  worth  imposing  could  be  obtained  with- 
out its  payment  being  extended  over  a  term 
of  years,  thus  involving,  to  some  extent  at 
least,  the  objections  already  referred  to. 

There  is  one  important  phase  of  the  poli- 
tical results  of  imposing  a  very  large  in- 
demnity which  must  not  be  overlooked. 
Whether  an  indemnity  be  imposed  or  not,  it 
will  be  necessary  for  Germany  after  the  war 
to  raise  new  taxes  in  order  to  defray  her  war 
expenditure.  The  increase  in  her  national 
debt  will  call  for  at  least  an  extra  twenty 
millions  a  year  in  interest.  It  must  be  some 
years  before  imports  reach  their  pre-war 
level,  and  there  will  therefore  be  a  greatly 


THE   INDEMNITY   AND   GERMAN    POLITICS  221 

reduced  yield  from  customs  duty,  the  prin- 
cipal   normal    source    of    Imperial    revenue. 
An  attempt  may  be  made  to  increase  the 
yield  from  this  source  by  raising  the  tariff, 
but  it  is  very  doubtful  whether  at  such  a 
time  any  material  increase  in  revenue  could 
be  obtained  in  this  way.     The  excise,  post, 
telegraph,   and   stamps   will   probably   yield 
less  than  in  1913,  and  it  is  doubtful  whether 
by  any  device  they  could  be  made  more  pro- 
ductive.    Large  capital  levies,  such  as  that 
which  was  made  in  Germany  shortly  before 
the  war,  will,  for  the  reasons  we  have  indi- 
cated,  be  impracticable.     The  expedient  of 
raising  loans  by  which  deficits  for  many  years 
past  have  been  made  up,  may  still  be  tried, 
but  is  unlikely  to  prove  very  productive.     In 
all  probability,  therefore,  direct  taxation  on 
a  very  substantial  scale  must  be  resorted  to. 
For  various  reasons  the  German  people  have 
always    vehemently    resented    proposals    for 
raising  Imperial  revenue  by  direct  taxation, 
and  it  is  safe  to  assume  that  the  imposition 
of  new  Imperial  taxation  will  arouse  bitter 
resentment.     The  reaction  against  the  policy 
of  the  military  clique,  who  have  control  of 
German  foreign  politics,  is  likely  to  be  bitter 
and  lasting.     Their  one  claim  to  be  followed 
16 


222      THE  ECONOMIC  FACTORS  OF  THE   SETTLEMENT 

by  the  German  people  has  been  based  upon 
the  supposition  of  their  ability  to  organise 
victory.  Discredited  by  defeat,  they  will 
lose  their  only  hold  upon  the  mass  of  the 
people.  In  these  circumstances,  the  resent- 
ment aroused  by  the  new  taxation  will  almost 
certainly  be  concentrated  on  the  militarist 
party.  It  is  to  the  obvious  advantage  of 
Europe  as  a  whole  that  the  influence  of  the 
military  caste  in  German  politics  should  be 
weakened.  The  attempt  to  destroy  the  Prus- 
sian regime  by  force  from  without  would  cer- 
tainly defeat  its  object.  Reform  must  come 
from  within,  and  the  discontent  aroused  by 
the  financial  burden  left  by  unsuccessful  war 
will  be  one  of  the  most  potent  instruments 
in  the  overthrow  of  the  Prussian  bureaucracy. 
If,  however,  the  imposition  of  an  immense 
indemnity  causes  the  German  people  to 
associate  the  new  taxation  with  the  exac- 
tions of  the  Allies,  their  resentment  will  be 
diverted  from  their  own  discredited  leaders 
to  the  Allied  Governments.  The  one  hope 
of  the  Prussian  clique  is  that  they  should  be 
able  to  hold  themselves  out  as  the  natural 
leaders  of  Germany  in  resistance  to  foreign 
oppression,  and  the  payment  of  a  great 
indemnity    might    be    dearly    purchased    by 


WOULD   GERMANY   DISARM  ?  223 

affording  to  those  who  are  most  responsible 
for  the  present  war  the  one  instrument  by 
which  they  could  maintain  their  hold  upon 
the  German  people. 

It  may  be  suggested  that  the  effect  of  the 
indemnity  upon  German  -taxation  might  be 
balanced  to  some  extent  by  compulsory  dis- 
armament of  the  German  Empire,  and  the 
consequent  saving  of  some  fifty  millions  per 
annum.  This  is  a  political  question  which 
has  been  discussed  elsewhere.  To  impose 
compulsory  disarmament  upon  Germany 
would  practically  involve  permanent  occupa- 
tion of  the  country.  Whether  the  effect  of 
the  financial  stringency  produced  by  an  in- 
demnity would  be  to  induce  the  Germans 
voluntarily  to  effect  such  savings  upon  the 
military  and  naval  credits  as  would  enable 
them  to  meet  the  burden  of  the  indemnity  is 
doubtful.  It  is  at  least  possible  that  the 
effect  upon  a  tenacious  and  warlike  people 
might  be  to  induce  them  rather  to  strain 
every  nerve  for  a  speedy  restoration  of  their 
military  establishments  such  as  would  en- 
able them  once  more  to  accept  the  chance  of 
war  and  so  rid  themselves  of  the  burden 
which  they  most  resented. 

We  have  been  dealing  so  far  mainly  with 


224      THE  ECONOMIC  FACTORS  OF  THE   SETTLEMENT 

the  possibility  of  exacting  an  indemnity 
and  with  the  political  effects  to  be  ex- 
pected from  its  exaction.  In  calculating 
the  balance  of  advantage,  these  political 
considerations  form  the  most  important 
factor.  Even  from  the  narrowest  financial 
point  of  view  we  are  obliged  to  take  into 
account  the  possibility  of  increased  arma- 
ments and  greater  risk  of  future  war  having 
to  be  set  off  against  the  amount  of  the  in- 
demnity exacted.  When  we  come  to  con- 
sider the  broad  lines  of  policy  and  the  possi- 
bility of  such  a  reconstruction  of  European 
society  as  has  been  indicated  by  the  Allied 
Governments  in  their  declarations  concerning 
the  objects  of  the  war,  it  is  obvious  that  these 
political  considerations  are  of  paramount 
importance. 

The  whole  question  of  the  economic  reac- 
tions set  up  by  indemnities  is  one  of  great 
difficulty,  and  the  data  before  us  are  hardly 
sufficient  to  enable  even  the  expert  in 
economics  to  make  any  dogmatic  pronounce- 
ment upon  the  subject.  The  possibility  of 
such  reactions  must,  however,  be  taken  into 
consideration  in  conjunction  with  the  poli- 
tical consequences  above  referred  to,  in  decid- 
ing whether  the  exaction  of  a  great  indemnity 


GERMAN   CREDIT   AND    BRITISH    PROSPERITY        225 

is  desirable  ;    and,   if  so,   at  what  figure  it 
should  be  placed. 

There  is  one  economic  consideration — per- 
haps the  most  important  of  all — which  does 
stand  out  clearly.  To  the  extent  to  which 
the  payment  of  the  indemnity  left  Germany 
impoverished,  her  value  as  a  market  for  the 
British  exporter  would  be  diminished.  To 
talk  of  "  wiping  Germany  off  the  commercial 
map  and  adjusting  our  trade  to  the  new 
geography  "  is  not  to  talk  business.  When 
the  war  is  over  the  nations  of  the  world  will 
continue  to  buy  from  those  countries  which 
can  best  produce  the  goods  they  need,  and 
will  continue  to  sell  to  those  nations  where 
the  demand  for  their  own  productions  is 
greatest.  The  British  business  man  knows — 
even  if  the  British  journalist  does  not — that 
you  cannot  destroy  the  purchasing  power  of 
Germany  without  injury  to  British  trade. 
It  is  true  that  we  buy  more  from  Germany 
than  we  sell  to  her,  but  the  amount  is 
balanced  by  the  services  of  our  merchant 
marine  and  by  our  exports  to  the  countries 
from  which  her  imports  are  drawn.  Finance 
and  commerce  cannot  be  divided  into  water- 
tight compartments,  and  in  striving  to 
destroy    the    trade    of    a    rival    we    might 


226      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

inflict  irreparable  injury  upon  our  own  pros- 
perity. 

It  is  this  last-mentioned  factor  which  is  of 
most  importance  when  we  consider  the  only 
motive  for  imposing  an  indemnity  which  has 
not  yet  been  discussed — the  impoverishment 
of  the  vanquished  in  order  to  prevent  re- 
newed military  aggression  or  commercial 
rivalry  on  his  part.  However  he  may  be 
impoverished,  he  will,  if  driven  to  extremes, 
find  the  means  for  maintaining  armaments 
that  may  disturb  the  peace  of  Europe  ;  and 
the  attempt  to  get  rid  of  his  commercial 
competition  by  destroying  his  prosperity  is 
a  double-edged  weapon  with  which  a  wise 
statesmanship  will  not  play. 

It  is  doubtful,  however,  even  if  it  were 
desirable — which  it  certainly  is  not — to  seek 
to  hamper  a  nation's  commercial  life  in  this 
way,  whether  the  imposition  of  an  indemnity 
might  not  have  a  contrary  effect.  It  should 
be  borne  in  mind  that  payment  of  large  sums 
by  one  nation  to  another  can  only  be  made 
ultimately  in  the  form  of  goods.  The  en- 
forced export  of  commodities  in  such  huge 
quantities  as  a  two  thousand  million  in- 
demnity would  involve  cannot  but  stimu- 
late the  industrial  activities  of  the  nation 


THE   ECONOMIC    REACTIONS   OF   INDEMNITIES      227 

paying  the  indemnity  ;  and  unless  the  most 
elaborate  precautions  be  taken,  it  might 
correspondingly  depress  the  industries  of  the 
receiving  nations.  It  is  not  suggested,  of 
course,  that  the  activities  so  produced  in  the 
paying  countries  would  be  normally  profitable 
— the  position  would  rather  be  that  of  work- 
ing at  high  pressure  for  the  smallest  profits 
or  at  an  actual  loss — but  in  considering  the 
imposition  of  an  indemnity  for  the  purposes 
of  crippling  the  vanquished  people,  it  becomes 
necessary  to  inquire  whether  the  unfailing, 
continuous  demand  for  exports  which  this 
proposal  would  involve  would  not  give  such 
an  opportunity  for  production  on  a  large 
scale  and  for  the  perfecting  of  productive 
organisation  and  machinery  that,  on  the  final 
discharge  of  the  indemnity,  the  nation  paying 
would  be  a  most  formidable  commercial 
competitor. 

Various  ingenious  proposals  have  been  put 
forward  for  avoiding  the  economic  and  poli- 
tical disadvantages  inherent  in  the  exaction 
of  a  great  capital  levy  or  in  the  payment  of 
an  indemnity  by  instalments.  It  has  been 
suggested,  for  instance,  that  Germany  should 
issue  stock  to  the  amount  of  the  indemnity, 
to  be  upon  the  same  conditions  as,  and  to 


228      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

rank  pari  passu  with,  her  ordinary  securities. 
Another  suggestion  is  that  all  German  in- 
vestments in  foreign  countries  should  be 
transferred  to  the  Allied  Governments,  leaving 
the  German  Government  to  settle  with  its 
own  subjects.  No  doubt  there  is  a  good  deal 
to  be  said  in  favour  of  placing  the  payment 
of  any  indemnity  which  may  be  exacted  as 
much  as  possible  on  the  same  footing  as  the 
discharge  of  pre-existing  Government  obliga- 
tions. It  is,  however,  extremely  doubtful,  to 
say  the  least,  whether  it  would  be  possible, 
in  practice,  to  render  any  particular  issue  of 
stock  or  bonds  indistinguishable  from  other 
stock.  It  would  always  be  open  to  the 
Germans  to  repudiate  the  issue  of  1915  or 
1916,  without  proclaiming  a  general  bank- 
ruptcy. Knowing  this,  financiers,  especially 
those  outside  the  Allied  States,  would  be  ex- 
ceedingly chary  of  taking  up  the  stock,  and 
the  unloading  by  the  Allied  Governments 
would  in  fact  prove  a  very  difficult  operation. 
A  similar  objection  applies  to  the  proposal 
to  seize  the  foreign  investments  of  German 
subjects.  It  will  be  obvious  that  this  in- 
volves either  the  confiscation  of  private  pro- 
perty or  the  indemnification  of  the  investors 
by  the  German  Government — an  operation 


CONFISCATION    OF   GERMAN    INVESTMENTS       229 

which  would  entail  all  the  disadvantages  we 
have  hitherto  discussed.  It  is,  moreover,  by 
no  means  clear  that  the  firms  in  foreign 
countries,  by  whom  these  stocks  and  shares 
were  originally  issued,  would  welcome  their 
compulsory  transference  into  other  hands. 
The  investment  of  capital  and  the  carrying 
on  of  ordinary  commercial  relations  go  fre- 
quently— more  frequently,  perhaps,  than 
people  realise — hand  in  hand ;  and  the 
sudden  change  in  the  ownership  of  in- 
vested capital  might  react  very  seriously 
upon  the  commercial  prosperity  of  peoples 
in  no  way  concerned  with  the  war  or  its 
outcome.  It  is  probable  also  that  it  would 
result  in  a  serious  depreciation  of  the 
securities.  It  would  not  be  possible  within 
the  scope  of  this  book  to  arrive  at  any  con- 
clusion as  to  the  best  way  to  manipulate  the 
payment  of  an  indemnity  in  case  one  should 
be  imposed.  Speaking  in  general  terms, 
however,  it  must  be  considered  questionable 
whether  any  financial  manipulation  can  be  de- 
vised which  will  wholly  remove  the  disadvant- 
ages that  necessarily  accompany  a  great 
forced  transference  of  wealth  of  this  kind. 

There  is  one  factor  which  it  is  impossible 
to  ignore,  whether  we  propose  to  raise  a  great 


230      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

capital  sum  from  Germany  or  to  impose  upon 
her  the  payment  of  heavy  instalments  or 
interest.  For  many  years  the  piling-up  of 
gigantic  national  debts,  due  principally  to 
armament  competition,  has  been  a  source  of 
anxiety  to  many  financiers.  These  national 
debts  will  be  enormously  increased  by  the 
cost  of  the  war,  and  if  the  burden  of  a  great 
indemnity  is  to  be  added  to  the  debts  of  Ger- 
many and  Austria,  it  is  not  improbable  that 
we  shall  be  brought  within  measurable  dis- 
tance of  a  repudiation  by  these  countries. 
While  some  of  us  might  feel  a  measure  of 
savage  satisfaction  with  the  idea  that  the 
aggressive  designs  of  Germany  had  brought 
her  to  national  bankruptcy,  it  is  certain  that 
such  catastrophe  would  not  be  viewed  with- 
out the  gravest  apprehensions  by  the  financial 
and  business  community  here  as  in  the  rest 
of  the  world. 

There  is  one  item  which  stands  apart  from 
the  general  question  of  indemnities — that  is, 
compensation  to  Belgium.  The  sum  required 
to  make  good  the  devastation  of  Belgium 
and  set  the  Belgian  people  upon  their  feet, 
although  substantial,  is  not  comparable  with 
that  which  would  be  required  for  a  general 
compensation  to  the  Allies.    It  does  not  in- 


COMPENSATION   TO   BELGIUM  231 

volve  the  same  financial  difficulties,  and  even 
if  it  did  they  would  not  be  allowed  to  stand 
in  the  way.  There  is  universal  recognition 
that  the  case  of  Belgium  is  distinguishable 
from  that  of  all  the  other  nations  engaged  in 
the  war.  Not  only  was  she  guiltless  of  any 
share  in  the  events  which  brought  about  the 
catastrophe,  she  was  wholly  without  interest 
in  any  of  the  questions  involved.  The  suffer- 
ings which  the  Belgian  people  have  undergone 
have  devolved  upon  them  solely  by  their 
determination  to  fulfil  honourable  engage- 
ments, and  the  Allies,  who  owe  so  much  to 
the  heroic  stand  made  by  Belgium  in  the 
early  days  of  the  war,  are  bound  to  see  her 
righted.  It  was  not  until  the  universal  in- 
dignation of  the  civilised  world  had  made 
itself  felt  that  even  the  German  Government 
made  any  pretence  that  the  invasion  of  Bel- 
gium was  actuated  by  other  motives  than 
those  of  military  necessity,  which  they  pre- 
sumed to  override  considerations  of  inter- 
national morality.  At  an  early  stage  the 
German  Chancellor  declared  that  the  wrong 
which  was  done  to  Belgium  by  the  violation 
of  her  neutrality  should  be  repaired  ;  and 
the  Allies  will  certainly  see  to  it  that  this 
promise  is  fulfilled.     In  Germany  itself  the 


232      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

national  conscience  has  been  uneasy  over  the 
outrage  to  Belgium,  and  the  demand  for 
compensation  in  this  case  (which  might  be  a 
first  charge  upon  the  German  and  Austrian 
revenues  for  a  term  of  years)  would  be  free 
from  the  political  objections  which  compli- 
cate the  general  question  of  indemnities. 
Whatever  resentment  this  additional  taxa- 
tion might  involve  would  be  directed  against 
those  whose  doctrine  of  military  necessity 
has  dragged  Germany  into  a  false  position. 

It  may  be  noted  that  where,  as  in  this 
case,  the  indemnity  is  required  for  the  re- 
establishment  of  railways,  bridges,  and  roads, 
rebuilding  of  demolished  houses  and  factories, 
the  commodities  brought  into  the  country 
will  take  the  form  of  materials  for  these  pur- 
poses ;  and  the  transaction  will  be  wholly  or 
largely  free  from  any  fear  of  the  injurious 
reactions  the  possibility  of  which  has  already 
been  discussed.  In  this  instance  the  influx 
of  capital  would  be  created  in  the  very  place 
where  it  was  most  required  in  the  work  of 
industrial  and  financial  re-establishment,  and 
to  which  it  would  in  any  case  be  drawn. 

The  Allies  are  not  likely  to  forget  their 
obligations  to  Belgium  and  they  may  con- 
ceivably desire  of  their  own  free  will  to  con- 


RESTORATION    OF   DEVASTATED   AREAS         233 

tribute  to  her  financial  restoration,  but  there 
is  every  moral  justification  for  imposing  the 
burden  of  restitution  upon  the  original  vio- 
lators of  Belgian  neutrality. 

The  question  of  the  devastated  areas  in 
France  and  Western  Russia  may  also  be 
raised.  In  these  cases  the  economic  con- 
siderations are  covered  by  what  has  already 
been  said  with  regard  to  Belgium,  although 
the  moral  claim  cannot  be  placed  upon  quite 
the  same  footing.  It  is  possible  that  in  view 
of  the  amount  of  destruction  both  to  public 
and  private  property  necessarily  involved  by 
the  operations  of  war,  there  may  be  a  re- 
ciprocal arrangement  for  the  restoration  of 
property  destroyed  by  either  side  in  the 
course  of  operations  upon  hostile  soil ;  and 
if  the  Germans  have  committed  devastations 
beyond  those  inseparable  from  military  neces- 
sities, they  will  go  to  swell  the  total. 

The  imposition  of  an  indemnity  is  not  the 
only  form  in  which  financial  and  economic 
considerations  might  directly  affect  the  terms 
of  the  settlement  and  the  policy  of  the  Allies 
after  the  war.  While  there  is  a  universal 
disclaimer  of  the  idea  that  their  action  was, 
or  could  be,  influenced  by  commercial  con- 
siderations, expression  is  frequently  given  to 


234   THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

the  idea  that  their  disavowal  of  financial 
motives  need  not  prevent  them  from  taking 
advantage  of  such  incidental  benefits  as  a 
victorious  war  may  give  them.  Against  this 
it  is  urged  that  in  a  war  waged  to  maintain 
the  sanctity  of  the  plighted  word,  of  inter- 
national law,  the  Allies  are  bound  to  exercise 
a  most  scrupulous  delicacy  in  acting  up  to 
their  own  declarations  ;  and  that  it  would  be 
very  undesirable  for  Great  Britain,  in  par- 
ticular, to  do  anything  which  might  give  colour 
to  the  belief  that  she  had  planned,  or  at  least 
welcomed  the  war,  as  a  means  of  destroying 
a  trade  rival  whom  she  was  unable  to  meet 
in  legitimate  competition.  It  is  pointed  out 
that  not  only  is  this  idea  widely  believed  in 
Germany,  but  that  it  has  been  sedulously 
preached  by  the  advocates  of  Germany  in 
neutral  countries.  The  moral  question  is 
one  as  to  which  widely  differing  judgments 
will  be  formed  ;  but  it  will  be  useful,  in  any 
case,  to  examine  some  of  the  proposals  which 
have  been  put  forward. 

In  the  first  place,  it  has  been  suggested  that 
the  complaint  of  British  traders  against  Ger- 
many has  had  no  reference  to  fair  and 
legitimate  competition,  but  to  methods  which 
bore  no  relation  to  the  ordinary  activities  of 


WILL   THERE   BE   A   COMMERCIAL   WAR  ?        235 

honest  commerce.  Germany's  methods  in 
trade,  it  is  said,  have  been  identical  with  her 
methods  in  war,  being  equally  backed  by  an 
aggressive  and  unscrupulous  State  policy, 
which  connives  at  the  stealing  of  inventions 
and  assists  deliberately  destructive  competi- 
tion in  selected  lines  of  manufacture,  by  State 
bounties  and  special  railway  and  shipping 
rates.  According  to  this  view  commerce  in 
Germany  is  regarded  as  a  form  of  war,  a  sus- 
tained effort  to  destroy  the  prosperity  of 
other  States  by  any  means  which  is  capable 
of  inflicting  injury.  On  this  assumption  it 
is  argued  that  the  ordinary  considerations 
affecting  commercial  relations  do  not  apply 
in  the  case  of  the  German  people  ;  that  we 
must  meet  war  by  war  and  that  advantage 
should  be  taken  of  the  settlement  to  place 
ourselves  in  a  strong  position  for  the  economic 
struggle  which  will  succeed  to  the  conflict  of 
arms.  Among  the  methods  of  carrying  out 
this  design  which  have  been  suggested  are 
the  levying  by  Britain  of  a  heavy  discrimina- 
tory tariff  on  German  manufactures ;  the 
creation  of  a  Zollverein,  to  include  all  the 
Allied  Powers,  for  the  purpose  of  economic 
warfare  with  Germany  ;  the  imposition  of 
countervailing   duties  on  bounty-fed   manu- 


236      THE   ECONOMIC   FACTORS   OF   THE   SETTLEMENT 

factures  ;  the  imposition  upon  Germany  of 
a  free  trade  system  in  regard  to  the  Allied 
countries  ;  and  the  levying  by  the  Allies  of 
an  export  duty  on  German  manufactured 
goods. 

It  is  not  necessary  to  enter  into  any 
discussion  of  the  general  question  of  free 
trade  and  tariffs,  but  it  must  be  clearly 
said  that  there  are  no  special  circumstances 
arising  out  of  the  war  which  make  the  im- 
position of  penal  duties  on  German  goods 
more  or  less  desirable  at  this  time  than  they 
have  always  been.  Admitting  that  the  Ger- 
mans may  have  used  unscrupulous  commercial 
methods,  the  fact  remains  that  the  greater 
part  of  their  commercial  expansion  has  been 
gained  by  scientific  methods  of  production 
and  painstaking  organisation.  It  is  difficult 
to  see  where  this  theory  of  economic  warfare 
is  to  lead  us,  and  it  is  very  doubtful  whether 
we  should  have  anything  to  gain  by  accept- 
ing and  encouraging  a  conception  of  com- 
mercial relations  which  might  be  used  against 
ourselves  by  other  countries  in  the  future. 
The  whole  fabric  of  our  vast  trade  has  been 
built  up  upon  the  idea  that  in  the  long  run 
commercial  prosperity  can  be  best  secured 
by  excellence  of  production  and  a  reputation 


THE    REPLY   TO   COMPETITION  237 

for  honest  dealing.  If  that  idea  is  true,  the 
best  reply  to  unscrupulous  competition  is 
probably  to  be  found  in  an  adherence  to  our 
old  policy,  coupled  with  willingness  to  adopt 
whatever  is  legitimate  in  the  methods  of  our 
rival — improved  processes  of  production  and 
distribution  and  a  greater  regard  for  the  re- 
quirements of  customers.  So  long  as  our 
manufacturers  and  merchants  can  maintain 
the  quality  of  their  goods  and  their  reputation 
for  fair  dealing,  they  have  nothing  to  fear 
from  legitimate  competition  ;  and  the  methods 
of  illegitimate  competition  are  likely  to  recoil 
upon  the  heads  of  those  who  use  them.  We 
are  not  discussing  here  the  questions  of  tariffs 
imposed  for  purposes  of  revenue,  the  protec- 
tion of  infant  industries,  or  the  political  aspects 
of  Imperial  preference.  The  question  before 
us  is  that  of  entering  upon  a  definite  tariff 
war  with  Germany  based  upon  the  supposi- 
tion that  the  traders  of  the  two  countries 
bear  to  each  other  the  relations  of  hostile 
armies.  It  will  need  much  more  convincing 
arguments  than  any  which  have  yet  been  put 
before  us  to  persuade  us  to  such  a  course. 

The  creation  of  a  Zollverein  of  the  Allied 
States  for  the  purposes  of  carrying  on  this 
economic  warfare  is  open  to  all  the  objections 

17 


238      THE  ECONOMIC   FACTORS  OF  THE   SETTLEMENT 

already  urged.  It  introduces,  also,  practical 
difficulties  of  considerable  magnitude  owing 
to  the  widely  different  fiscal  systems  that 
prevail  in  the  several  countries.  No  small 
part  of  these  difficulties  might  very  well  arise 
in  the  case  of  the  British  Overseas  Dominions. 
The  steadfast  refusal  of  the  Imperial  Govern- 
ment to  interfere  in  the  fiscal  arrangements 
of  the  self-governing  Dominions  has  been  one 
of  the  keystones  of  our  Imperial  policy.  It 
would  be  in  the  highest  degree  injudicious  to 
bring  pressure  upon  them  now  for  the  pur- 
pose of  securing  their  co-operation  in  a  com- 
mercial warfare  of  this  kind.  It  involves, 
moreover,  political  considerations  of  the 
highest  importance.  Any  nation  or  group  of 
nations  is  free  at  any  time  to  adopt  any  fiscal 
system  which  it  may  think  desirable.  It  does 
not  require  that  Germany  should  be  in  a 
state  of  military  prostration  for  the  govern- 
ments of  any  countries  which  may  feel 
aggrieved  by  her  commercial  competition  to 
agree  upon  measures  of  fiscal  retaliation. 
But  the  suggestion  that  they  should  be 
adopted  as,  in  fact,  a  continuation  of  the  war 
— a  mere  shifting  of  the  field  of  hostilities — 
is  open  to  grave  objections  which  have  no- 
thing to  do  with  economics.     To  associate 


THE  PROPOSAL  FOR  AN  ALLIED  ZOLLVEREIN   239 

the  settlement  with  the  creation  of  a  Zoll- 
verein  by  the  Allies,  aimed  definitely  at  the 
crippling  of  German  trade,  would  not  only 
compromise  their  proclamations  of  disin- 
terestedness and  prolong  indefinitely  the 
hatreds  and  suspicions  caused  by  the  war  ; 
it  would  involve  an  acceptance  of  the  whole 
Prussian  theory  of  the  relations  of  States, 
and  would  effectually  defeat  the  efforts  of  the 
reform  party  in  Germany.  Its  political  re- 
sult would  be  to  render  altogether  impossible 
any  attempt  to  lay  the  foundations  of  a 
general  European  understanding. 

The  suggestion  that  discriminating  duties 
should  be  imposed  on  any  German  goods 
the  export  of  which  is  stimulated  by  bounties, 
is  a  measure  of  lesser  importance  which  in- 
volves no  particular  economic  principle. 
Temporary  bounties,  deliberately  designed 
to  injure  the  industries  of  another  country, 
are  admitted  b}7  Free  Trader  and  Protectionist 
alike  to  be  vicious  in  their  effects  and  in- 
capable of  justification.  No  valid  objection 
necessarily  arises  to  a  scheme  for  the  imposi- 
tion of  countervailing  import  duties  ;  but 
such  a  scheme  can  be  (and  could  have  been) 
adopted  at  any  time.  Whether  desirable  or 
not  on  general  principle,  it  is  doubtful  whether 


240      THE   ECONOMIC   FACTORS   OF  THE   SETTLEMENT 

it  would  be  politic  to  connect  a  new  depar- 
ture of  this  nature  with  the  termination  of 
the  war  and  to  restrict  it  to  imports  coming 
from  the  defeated  country.  It  should  not  be 
forgotten  that  complaints  as  to  bounties 
have  not  been  confined  to  goods  from  Ger- 
many ;  and  it  is  highly  improbable  that  the 
German  Government  will  be  able  to  find 
money  for  this  purpose  in  the  immediate 
future. 

The  imposition  and  collection  by  the  Allies 
of  an  export  duty  on  German  manufactures, 
during  a  fixed  term  of  years,  is  a  somewhat 
fantastic  proposal  which  is  not  likely  to  re- 
ceive much  consideration.  It  may  well  be 
doubted  whether  it  would  not  injure  the 
British  consumer  more  than  the  German 
manufacturer.  But  the  overwhelming  objec- 
tion is  political.  The  scheme  would  entail 
the  military  occupation  of  ports  and  frontier 
railway  depots,  involving  endless  friction  and 
the  abandonment  of  all  hope  of  a  settled 
Europe. 

In  considering  all  the  various  schemes  put 
forward,  it  is  impossible  to  get  away  from 
the  fact  that  fiscal  systems  are  domestic 
concerns,  and  the  history  of  the  past  two 
hundred  years  points  to  the  futility  of  at- 


BATTLESHIPS   CANNOT   FIGHT   TARIFFS  24I 

tempting  to  dictate  them,  at  any  rate  as 
between  industrially  civilised  nations.  It  is 
something  more  than  a  coincidence  that 
tariff  wars  between  nations  have  seldom 
synchronised  with  periods  of  armament 
rivalry.  It  seems  to  have  been  instinctively 
realised  that  economic  rivalries  must  be 
pursued  by  economic  methods  and  not  by 
the  use  of  military  power  to  modify  fiscal  re- 
lations. Whether  open  ports  or  retaliatory 
duties  provide  the  best  weapon  with  which 
to  fight  hostile  tariffs  is  a  matter  of  con- 
troversy ;  but  that  they  cannot  be  fought  by 
army  corps  and  battleships  is  tacitly  admitted 
by  the  policy  of  statesmen.  Whatever  may 
be  the  future  commercial  relations  between 
the  Allies  and  the  Germanic  Powers,  it  is  very 
doubtful  whether  anything  would  be  gained 
by  reversing  this  policy  and  using  the  oppor- 
tunity of  military  victory  to  dictate  fiscal 
rearrangements.  It  would,  at  any  rate,  set 
a  dangerous  precedent  which  might  be  fol- 
lowed by  other  States  in  the  future  with  less 
justification. 

It  has  already  been  suggested  that  in  any 
territorial  rearrangements  the  economic  fac- 
tors will  have  to  be  taken  into  account.  It 
would  be  a  disastrous  error  to  allow  an  ex- 


242      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

elusive  preoccupation  with  questions  of  race 
and  language  to  result  in  such  a  redrawing  of 
boundaries  as  would  sever  the  connection 
between  any  great  seaport  and  the  districts 
for  which  it  is  the  natural  outlet.  The  result 
would  be  ruinous  alike  to  the  port  and  the 
hinterland.  The  interposition  of  arbitrary 
bars  to  the  economic  development  of  any 
people  is  equally  injurious  to  the  general 
commercial  prosperity  of  the  world  and  pro- 
ductive of  political  friction.  In  cases  where 
geographical  and  economic  considerations 
conflict  directly  with  the  principle  of 
nationality  and  the  political  desires  of  the 
inhabitants  of  any  great  coast  town,  the  best 
solution  seems  to  be  its  establishment  as  a 
free  port.  It  may  either  become  a  little  self- 
governing  community  or  pass  under  the 
national  flag  of  its  inhabitants,  but  it  must 
not  be  shut  off,  by  inclusion  in  any  new 
tariff  zone,  from  the  commerce  of  the  hinter- 
land. 

There  remain  to  be  considered  a  few 
financial  details  of  the  settlement.  Any  sug- 
gestions for  the  confiscation  of  interned  ships 
and  of  the  sums  held  in  trust  by  the  Public 
Trustee  must  be  severely  discountenanced 
in  all  cases  where  they  are  not  clearly  forfeit. 


SOME   DETAILS   OF   THE   SETTLEMENT  243 

The  monetary  sums  involved  would  be  com- 
paratively trifling,  the  moral  issue  is  of  the 
highest  importance.  We  have  gone  into  this 
war  to  uphold  the  sanctity  of  law,  and  it  would 
be  better  to  err  on  the  side  of  generosity  than 
to  give  the  slightest  colour  to  those  accusa- 
tions of  hypocrisy  which  are  made  by  our 
enemies.  Completely  to  disprove  these  alle- 
gations will  be  a  moral  triumph  greater  even 
than  our  military  victory. 

The  same  considerations  will  guide  us  in 
dealing  with  the  question  of  patent  rights  and 
of  compensation  in  respect  of  all  patents  for 
which  special  "  licences  to  manufacture " 
have  been  granted.  Apart  from  the  moral 
aspect  of  the  question,  it  must  be  remem- 
bered that  patent  arrangements  are  reciprocal 
and  that  we  should  lose  more  than  we  gained 
by  repudiating  them.  We  are  bound  by  a 
convention  with  regard  to  patents  which  in- 
cludes not  only  Germany  but  many  neutral 
countries,  and  it  is  to  our  own  interest  that 
it  should  be  scrupulously  observed. 

On  the  other  hand,  there  seems  to  be  no 
reason  why  claims  for  compensation  in  re- 
spect of  acts  of  war  which  arc  contrary  to  the 
recognised  laws  of  warfare  should  not  be 
presented  and  assessed  by  the  Hague  Tribunal 


244      THE  ECONOMIC  FACTORS  OF  THE  SETTLEMENT 

or  by  any  impartial  arbitrator.  And  while 
we  shall  scrupulously  observe  our  own  obliga- 
tions with  regard  to  sums  and  property  held 
in  trust,  we  shall  exact  an  equally  scrupulous 
performance  of  such  obligations  by  the  enemy* 
It  would,  however,  be  a  grave  political  error 
to  constitute  ourselves  judges  in  our  own 
cause  by  confiscating  sums  held  in  trust  for 
the  purpose  of  providing  such  compensation. 
Breaches  of  the  law  by  our  opponents  con- 
stitute no  argument  for  its  non-observance 
by  ourselves.  Moreover,  the  damages  com- 
mitted are  a  State  liability  which  cannot 
justifiably  be  wiped  out  by  the  confiscation 
of  private  property. 

It  will  be  noted  that  the  economic  factors 
of  the  settlement  have  been  treated  mainly 
in  connection  with  political  considerations. 
In  truth  it  is  impossible  to  sever  the  connec- 
tion between  the  two.  The  doctrine  that 
the  fundamental  object  of  all  government  is 
to  promote  the  good  of  the  governed  has  lifted 
commercial  activities  into  the  political  sphere. 
We  have  begun  to  discover  how  large  a  part 
economic  considerations — which  include  the 
possibility  for  the  mass  of  the  people  of  decent 
conditions  and  a  fair  standard  of  living — ■ 
play  in  the  promotion  of  national  health  and 


THE   RELATION    OF   ECONOMICS   TO   POLICY      245 

character.  No  government  which  exists  to 
promote  the  good  of  the  governed  can  afford 
to  despise  economic  questions  as  sordid. 

In  the  field  of  international  politics  the 
part  played  by  economics  is  equally  great. 
The  trade  and  finance  of  the  modern  world 
are  built  up  upon  a  system  of  international 
exchange  and  international  credit,  the  results 
of  which  cannot  be  neglected  in  any  estimate 
of  the  political  situation.  Their  tendency 
has  undoubtedly  been  to  increase  the  de- 
pendence of  each  country  upon  others  and 
to  promote  the  growth  of  co-operation  between 
peoples.  The  surplus  capital  of  a  highly 
developed  country  goes  to  develop  the  re- 
sources of  a  newer  State.  The  products  of  a 
manufacturing  community  go  to  pay  for  the 
food  of  those  who  make  the  goods  and  the 
raw  materials  of  which  they  are  made. 
Through  the  facilities  given  by  the  credit 
system  a  single  transaction  may  touch  the 
commerce  of  half  a  dozen  different  countries. 
Without  entering  into  a  detailed  discussion  of 
the  theories  which  have  been  based  on  these 
phenomena,  it  may  fairly  be  said  that  they 
cannot  leave  the  relationships  of  nations  un- 
modified. They  have  created  common  in- 
terests which  express  themselves  daily  in  the 


246      THE   ECONOMIC   FACTORS   OF  THE   SETTLEMENT 

Congresses  of  Bankers,  of  Shipowners,  of  the 
leaders  of  different  industries.  They  ex- 
press themselves  more  subtly  on  the  Stock 
Exchange  and  in  the  markets. 

It  is  not  to  be  supposed  that  the  com- 
munity of  interests  thus  created  will  over- 
ride the  considerations  of  honour,  of  nation- 
ality, of  the  desire  for  political  liberty.  So 
much  is  proved,  if  it  needed  proving,  by  the 
very  war  in  which  we  are  engaged.  It  was 
never  supposed  or  claimed  that  they  did 
supersede  these  things  by  real  students  of 
the  new  factors  in  international  relations, 
however  their  teaching  may  have  been  dis- 
torted by  those  who  half  understood  it. 
But  the  better  understanding  of  international 
economics  has  done  two  things :  it  has 
shown  that  the  spirit  of  conquest  and  domina- 
tion operates  as  disastrously  in  the  economic 
as  it  does  in  the  political  sphere,  and  it  has 
emphasised  the  community  of  interests  which 
already  existed  among  all  nations  who  de- 
sired to  develop  their  own  civilisation  under 
a  reign  of  law  and  order,  undisturbed  by  the 
incursions  of  lawless  force.  The  commercial 
partnership  of  the  nations  has  intensified  the 
convictions  of  a  real  community  of  States, 
which  is  the  foundation  of  those  principles 


THE   COMMUNITY    OF   STATES  247 

for  which  the  Allies  are  fighting.  It  is,  there- 
fore, a  factor  which  must  be  taken  into  account 
in  the  framing  of  the  settlement,  and  its  effect 
will  be  to  reinforce  and  to  facilitate  the 
operation  of  those  considerations  which  we 
have  already  discussed. 


CHAPTER    VII 

THE    EUROPE   OF   TO-MORROW 

We  have  assumed  throughout  the  course  of 
this  analysis  that  the  preservation  of  peace 
between  the  nations  of  Europe  is  an  end  in 
itself  desirable.  If  we  do  not  believe  this 
there  is  very  little  object  in  our  striving  for 
a  settlement  which  shall  be  free  from  provo- 
cation to  future  wars.  The  point  indeed 
appears  to  be  pretty  generally  conceded,  for 
the  straightforward  advocates  of  war  for 
war's  sake  are  few  and  far  between.  It  is 
easy  to  show  that  war  gives  an  opportunity 
for  the  display  of  splendid  virtues,  of  heroism, 
of  self-sacrifice,  of  determination.  It  is  easy 
to  point  out  that  it  is  better  to  accept  the 
evils  of  war  than  to  acquiesce  in  injustice  for 
the  sake  of  peace.  But  this  is  a  different 
thing  from  contending  that  war  is  in  itself 
desirable.  The  advocates  of  war  for  war's 
sake  have  yet  to  show  us  that  any  party  to 

the   present   struggle   could   secure   from   it 

248 


THE   MORAL   ISSUES   OF   THE   WAR  249 

material  advantage  proportionate  to  its  appal- 
ling cost.  They  have  yet  to  show  us  that 
successful  aggression  makes  for  the  uplifting 
of  national  character  ;  that  a  German  vic- 
tory would  make  for  the  greatness  of  the 
German  people.  Rather  we  believe  that  in 
gaining  the  world  Germany  would  have  lost 
her  own  soul.  If  we  regard  our  own  exer- 
tions in  the  war  as  a  worthy  expression  of 
the  national  spirit,  it  is  because  these  exer- 
tions are  animated  not  by  love  of  warfare, 
but  by  a  determination  to  curb  and  quell 
the  operation  of  that  spirit  from  which  wars 
arise — the  spirit  of  domination,  of  conquest, 
of  aggression.  We  are  putting  forth  our  full 
might  against  the  might  of  German}'  just 
because  we  do  not  believe  in  the  rule  of 
might.  That  is  why  we  shall  use  our  victory 
not  to  settle  disputed  questions  by  the  sword, 
but  to  clear  the  way  for  their  settlement  in 
accordance  with  the  dictates  of  justice  and 
public  right.  In  other  words  we  have  no 
object  in  view  at  the  end  of  the  war  other 
than  to  secure  those  conditions  which  a  wiser 
European  statesmanship  might  have  secured 
without  recourse  to  war.  We  have  no  wish 
to  upset  any  territorial  arrangements,  any 
national  institutions  which  are  the  result  of 


250  THE   EUROPE   OF   TO-MORROW 

free  and  natural  growth,  which  represent  the 
legitimate  national  aspirations  of  any  people. 
We  do  wish,  now  that  this  war  has  been 
forced  upon  us,  to  use  the  opportunity  it  has 
given  us  to  get  rid  of  arrangements  and  in- 
stitutions which  have  their  basis  in  force  and 
not  in  right,  to  limit  the  power  of  fanatics 
of  force  to  threaten  the  peace  and  liberties  of 
Europe.  Many  of  us  acknowledge  with  con- 
trition that  we  ourselves  have  not  been 
without  blame,  that  our  own  policy  has  been 
coloured  by  that  atmosphere  of  jealousy  and 
suspicion  and  intrigue  which  the  theory  of 
national  rivalry  and  the  arbitrament  of  force 
so  readily  creates.  We  do  not  believe  that 
true  patriotism  calls  us  to  shut  our  eyes  to 
the  errors  of  the  past,  for  only  by  seeing  them 
clearly  can  we  build  up  a  better  policy  for  the 
future.  Yet  on  the  whole  we  feel  that  we 
are  justified  in  believing  that  we  stand  in  this 
war  for  something  better  than  the  mere  con- 
flict of  armed  strength  with  armed  strength. 
We  stand  for  the  supremacy  of  those  prin- 
ciples of  agreement,  of  public  law,  of  liberty 
and  justice  upon  which  the  British  Empire 
has  been  built.  While  every  British  citizen 
to  whom  his  citizenship,  with  all  its  tradi- 
tions and  all  its  obligations,  is  dear,   must 


THE    DRAIN    OF   ARMAMENTS  251 

look  with  an  eager  longing  for  the  success  of 
the  British  arms  ;  while  our  blood  is  fired  by 
the  heroism,  the  dogged  persistence  and 
loyalty  of  our  Allies  ;  we  look  forward  to  their 
victory  with  a  peculiar  hope,  in  the  belief 
that  it  will  be  followed  by  a  peace  which  shall 
represent  the  victory  of  those  ideals  which 
are  the  very  salt  of  our  national  and  Imperial 
life  over  the  ideals  upon  which  the  Hapsburg 
and  Hohenzollern  philosophy  of  force  and 
domination  is  based. 

It  must  be  remembered  that  something 
more  is  implied  in  this  than  the  mere  avoid- 
ance of  future  wars.  It  implies  also  some 
relief  from  the  burden  of  armaments  which 
has  pressed  so  heavily  upon  the  nations  of 
Europe  during  all  the  years  of  peace.  The 
money  cost  of  this  burden  is  stupendous,  but 
its  significance  is  not  to  be  reckoned  in  terms 
of  the  Income  Tax.  Even  the  actual  money 
cost,  indeed,  is  not  so  sordid  a  consideration 
as  we  are  sometimes  led  to  think.  It  means 
not  merely  that  the  capitalist  or  the  bour- 
geois bears  a  heavier  taxation,  but  that 
thousands  of  millions  of  pounds  yearly  are 
being  expended  upon  objects  which  do  in- 
deed provide  immediate  wages,  but  which 
are  not  reproductive,   and  that   millions  of 


252  THE   EUROPE   OF  TO-MORROW 

able-bodied  men  are  diverted,  during  two  or 
three  of  their  best  years,  from  productive 
employment.  It  represents  so  much  capital 
and  labour  withdrawn  from  the  economic 
development  of  the  world.  This  is  reflected 
not  merely  in  the  diminution  of  the  sums 
available  for  the  measures  by  which  we  strive 
to  alleviate  distress,  but  in  lessened  produc- 
tivity, decreased  purchasing  power,  and  a 
lower  standard  of  life.  The  whole  question 
of  economic  development  is  bound  up  too 
closely  with  questions  of  national  health,  with 
the  happiness  and  well-being  of  the  people  in 
the  widest  sense  of  those  terms,  for  any  such 
drain  upon  national  resources  to  be  dismissed 
as  a  mere  matter  of  pounds,  shillings,  and 
pence.  But  the  most  serious  feature  of  the 
armament  burden  is  the  diversion  of  so 
much  ability  and  attention,  so  much  inven- 
tive, organising,  and  administrative  skill  to 
this  one  problem.  The  appliances  of  modern 
warfare — the  quickfirer,  the  torpedo  and  the 
siege  gun,  the  Dreadnought  and  the  sub- 
marine, high  explosives  and  up-to-date  forti- 
fication— represent  the  highest  triumphs  of 
mechanical  and  engineering  genius.  The  pre- 
paration of  strategical  plans  to  meet  every 
possible    contingency,    the    speeding    up    of 


THE   BURDEN   OF   EFFICIENCY  253 

mobilisation,  the  general  "  organisation  of 
victory,"  occupy  the  exclusive  attention  of 
some  of  the  best  brains  of  Europe.  The  naval 
and  military  professions  absorb  much  of  what 
is  most  devoted  and  self-sacrificing  in  every 
country.  The  constant  preoccupation  with 
problems  of  defence,  with  the  averting  of 
war  or  preparation  against  it,  claims  an  im- 
mense share  of  the  energies  and  abilities  of 
statesmen,  of  the  attention  and  patriotic 
devotion  of  citizens.  It  is  a  commonplace 
that  efficiency  in  war  and  in  that  foreign 
policy  which  is  dominated  by  the  threat  or 
fear  of  war  is  most  easily  obtained  by  methods 
of  government  which  are  not  conducive  to 
the  development  of  national  institutions  and 
liberties  in  peace.  The  necessity  for  military 
efficiency  has  warped  the  governments  of 
Europe  by  imposing  upon  them  a  tendency 
to  centralisation,  secrecy,  bureaucracy,  which, 
while  it  may  make  for  success  in  war,  goes 
far  to  render  war  imminent  and  peace  sterile. 
Hitherto,  all  proposals  for  mutual  limita- 
tion or  regulation  of  armaments  have  failed 
because  the  conception  of  the  European 
nations  as  rival  units,  or  groups  of  rival  units, 
rendered  anything  like  mutual  trust  or  agree- 
ment between  them  impossible.  Every 
18 


254  THE   EUROPE   OF   TO-MORROW 

nation  felt  that  in  the  last  issue  its  indepen- 
dence and  prosperity  depended  upon  its  own 
armed  strength,  and  while  any  one  of  a  score 
of  vexed  questions  might  at  any  moment 
plunge  Europe  into  war,  no  Power  dared  place 
any  limit  upon  the  measure  of  strength  which 
it  considered  necessary.  The  attempt  to 
limit  armaments  was  indeed  a  beginning  at 
the  wrong  end,  an  attempt  to  alleviate  a 
symptom  without  curing  the  disease.  Arma- 
ments and  war  itself  are  the  expression  of 
policy,  and  if  Europe  is  to  curtail  the  risk  of 
war  and  diminish  the  burden  of  armaments, 
it  will  only  be  by  the  adoption  of  a  wiser 
policy  in  the  relationships  of  the  European 
nations. 

We  have  seen  that  at  the  Congress  of 
Vienna  the  Tsar  Alexander  I  put  forward  a 
scheme  by  which,  in  effect,  the  relation  of  the 
European  States  should  be  regulated  by  a 
Confederation  of  the  Great  Powers,  guaran- 
teeing both  the  external  and  the  internal 
status  quo,  and  prepared  to  enforce  the  deci- 
sions of  its  Council  by  armed  intervention. 
This  scheme  was  strongly  opposed  by  the 
British  Government,  partly  on  the  ground 
that  it  represented  an  unwarrantable  inter- 
ference with  the  sovereign  rights  of  States, 


THE    CONGRESS   OF   VIENNA  255 

partly  because  it  involved  a  guarantee  of 
governments  which  had  no  moral  justification, 
partly  through  a  well-founded  fear  that  it 
would  become  a  mere  instrument  of  tyranny 
in  the  hands  of  the  continental  autocracies. 
The  plan  adopted  in  its  stead  was  simply 
the  protection  of  existing  territorial  arrange- 
ments by  a  series  of  treaties.  That  plan,  as 
we  have  seen,  failed  to  secure  permanent 
peace  because  it  was  based  on  an  artificial 
arrangement  of  frontiers  and  ignored  the 
rights  of  nationalities.  Nevertheless,  as  Mr. 
Alison  Phillips  has  said,  "  it  was  by  no  means 
wasted  effort.  ...  It  preserved  peace  dur- 
ing the  critical  years  following  the  fall  of 
Napoleon,  and  so  gave  to  Western  Europe 
the  opportunity  for  that  marvellous  in- 
dustrial and  economic  development  which 
was  to  change  the  face  of  the  world.  It  did 
more  than  this.  It  set  the  tradition  of  that 
feeling  of  common  interests  among  nations 
the  growth  of  which  is  the  strongest  factor 
making  for  peace."  ' 

Since  the  days  of  the  Congress  of  Vienna 
the  common  interests  of  nations  have  become 
much  more  obvious,  and  it  is  worth  while 
asking  whether  an  attempt  cannot  be  made 

1  The  Confederation  of  Europe,  pp.  298-9. 


256  THE   EUROPE   OF   TO-MORROW 

to  give  them  some  expression  more  per- 
manent, because  founded  on  a  more  natural 
basis,  than  that  of  the  Vienna  treaties. 

It  is  at  least  possible  that  the  settlement  at 
the  end  of  this  war  will  get  rid  of  the  more 
active  sources  of  European  unrest.  Whether 
or  no  all  the  vexed  questions  to  which  refer- 
ence has  been  made  will  be  settled,  we  may 
at  least  hope  that  the  more  burning  of  them 
will  have  been  closed  and  that  precedents 
will  have  been  set  by  which  the  settlement 
of  the  others  can  in  time  be  regulated.  This 
of  itself  may  be  expected  to  operate  in  the 
direction  of  a  slackening  in  the  armament 
competition,  by  removing  causes  of  conflict. 
Mr.  Winston  Churchill  has  indicated  very 
clearly  the  connection  of  cause  and  effect  in 
this  matter  : 

Let  us,  whatever  we  do,  fight  for  and  work  towards 
great  and  sound  principles  for  the  European  system. 
The  first  of  these  principles  which  we  should  keep 
before  us  is  the  principle  of  nationality — that  is  to  say, 
not  the  conquest  or  subjugation  of  any  great  community, 
or  of  any  strong  race  of  men,  but  the  setting  free  of  those 
races  which  have  been  subjugated  and  conquered.  And 
if  doubt  arises  about  disputed  areas  of  country,  we 
should  try  and  settle  their  ultimate  destination  in  the 
reconstruction  of  Europe  which  must  follow  from  this 
war  with  a  fair  regard  to  the  wishes  and  feelings  of  the 
people  who  live  in  them.     This  is  the  aim  which,  if  it 


FEAR  AS  THE  CAUSE  OF  ARMAMENTS    257 

is  achieved,  will  justify  the  exertions  of  the  war  .  .  . 
and  will  give  to  those  who  come  after  us  ...  a  better 
and  fairer  world  to  live  in  and  a  Europe  free  from  the 
causes  of  hatred  and  unrest  which  have  poisoned  the 
comity  of  nations  and  ruptured  the  peace  of  Christen- 
dom.1 

We  want  this  war  to  settle  the  map  of  Europe  on 
national  lines,  and  according  to  the  true  wishes  of  the 
people  who  dwell  in  the  disputed  areas.  After  all  the 
blood  that  is  being  shed,  we  want  a  natural  and  har- 
monious settlement,  which  liberates  races,  restores  the 
integrity  of  nations,  subjugates  no  one,  and  permits  a 
genuine  and  lasting  relief  from  the  waste  and  tension 
of  armaments  under  which  we  have  suffered  so  long.  .  .  . 
Let  us  have  a  fair  and  natural  adjustment  of  European 
boundaries.  Let  us  war  against  the  principle  of  one 
set  of  Europeans  holding  down  by  force  and  conquest 
against  their  wills  another  section. 2 

The  triumph  of  the  national  principle  over 
that  of  force  and  domination  will  not,  how- 
ever, be  sufficient  of  itself  to  put  an  end  to 
that  fear  of  aggression  which  breeds  arma- 
ments. Even  though  causes  of  conflict  be 
diminished,  France  with  her  stationary  popu- 
lation will  still  fear  Germany  with  her  high 
birth-rate.  Germany,  with  no  strong  natural 
frontier  to  the  east,  will  still  fear  the  immense 

1  London  Opera  House  speech,  Morning  Post,  September 
12,  1914. 

*  Interview  given  to  Giornale  d' Italia.  Text  issued  by 
Official  Press  Bureau:    Times,  September  25,  1914. 


258  THE   EUROPE   OF   TO-MORROW 

strength  of  Russia.  The  Allies  will  be 
apprehensive  of  a  German  war  of  revenge. 
Germany  will  live  uneasily  under  the  shadow 
of  their  predominance. 

The  rearrangement  of  frontiers  on  natural 
lines,  and  the  disappearance  of  many  points 
of  dispute,  may,  however,  pave  the  way  to  a 
step  which  would  modify  very  profoundly  the 
relations  of  the  European  States.  By  sweep- 
ing away  those  instances  of  domination  which 
have  caused  most  of  the  so-called  conflicts 
of  rights  and  interests,  it  will  leave  the 
nations  free  to  seek  those  common  interests 
which  are  every  day  becoming  more  domi- 
nant and  the  greatest  of  which  is  security 
against  aggression.  Whatever  we  may  think 
as  to  the  extent  to  which  the  doctrines  of  the 
Prussian  militarists  had  penetrated  the  minds 
of  the  German  people,  there  can  be  no  doubt 
that  the  main  instrument  by  which  they  were 
able  to  drag  the  German  people  after  them 
was  fear — fear  of  a  French  revanche,  fear  of 
a  Russian  invasion,  fear  of  British  naval 
power — fear  largely  baseless,  excited  by  un- 
scrupulous misrepresentation,  manipulated  by 
the  militarist  clique  for  their  own  purposes, 
but  in  itself  genuine  and  only  reproducing  in 
an  exaggerated  form  the  mutual  suspicions 


THE  CONCERT  OF  EUROPE         259 

on  which  European  diplomacy  has  been 
based.  On  the  side  of  the  Allies  we  have  seen 
that  the  realisation  of  this  common  interest, 
the  desire  for  protection  against  aggression, 
has  proved  sufficient  to  bring  together  in  loyal 
co-operation  for  the  attainment  of  a  common 
end  Powers  which  within  the  memory  of 
living  men  have  been  divided  by  the  most 
acute  friction,  by  actual  war.  Why  should 
not  this  common  interest  be  made  the  ground 
of  a  more  extended  co-operation  ?  The  idea 
is  not  a  new  one.  It  is  this  realisation  of  a 
common  interest  in  the  preservation  of  peace 
which  has  inspired  those  gatherings  of  the 
Concert  of  Europe,  which  however  clumsy  and 
ineffective  in  their  working,  did  at  least  avert 
the  outbreak  of  more  than  one  great  war. 
On  July  30,  1914,  Sir  Edward  Grey  wrote  : 

If  the  peace  of  Europe  can  be  preserved,  and  the 
present  crisis  safely  passed,  my  own  endeavour  will  be 
to  promote  some  arrangement  to  which  Germany  could 
be  a  party,  by  which  she  could  be  assured  that  no  aggres- 
sive or  hostile  policy  would  be  pursued  against  her  or 
her  allies  by  France,  Russia,  and  ourselves,  jointly  or 
separately.  I  have  desired  this  and  worked  for  it,  as 
far  as  I  could,  through  the  last  Balkan  crisis,  and, 
Germany  having  a  corresponding  object,  our  relations 
sensibly  improved.  The  idea  has  hitherto  been  too 
Utopian  to  form  the  subject  of  definite  proposals,  but 
if  this  present  crisis,  so  much  more  acute  than  any 


260  THE   EUROPE   OF   TO-MORROW 

Europe  has  gone  through  for  generations,  be  safely 
passed,  I  am  hopeful  that  the  relief  and  reaction  which 
will  follow  may  make  possible  some  more  definite  rap- 
prochement between  the  Powers  than  has  been  possible 
hitherto.1 

It  was  too  late  to  preserve  the  peace  of 
Europe  in  the  present  case,  but  there  seems 
to  be  no  reason  why  such  an  attempt  should 
not  be  made  successfully  after  the  war. 
Whatever  the  results  of  the  war,  it  will  leave 
the  nations  of  Europe  exhausted  and  sick  of 
conflict.  Governments  and  peoples  alike 
will  be  in  a  mood  to  listen  to  any  proposition 
which  gives  reasonable  assurance  of  a  period 
of  recuperation  in  which  the  ravages  of  war 
may  be  repaired  and  the  normal  life  of  the 
world  restored.  We  may  be  sure  that  among 
the  mass  of  the  people  in  every  country  there 
will  be  something  more  than  this.  There  will 
be  a  revolt — possibly  inarticulate  and  un- 
formulated, but  deep  and  strong — against  the 
whole  idea  of  war.  So  long  as  the  struggle 
continues,  the  people  of  all  the  belligerent 
nations  will  continue  to  bear  and  to  do 
whatever  is  required  of  them  by  their  country. 
We  assuredly  shall  not  flinch  from  our  task. 
We  shall  not  render  vain  the  outpouring  of 

1  White  Paper,  Miscellaneous  No.  6  (1914),  No.  101. 


THE  OPPORTUNITY  OF  STATESMANSHIP    26l 

our  blood  and  treasure  by  stinting  the  supply 
either  of  treasure  or  of  lives.  Nor  is  there  any 
reason  to  believe  that  our  opponents  will 
prove  themselves  less  grim  of  purpose.  But 
when  once  the  stimulus  of  the  struggle  has 
been  removed  the  reaction  will  set  in  and 
that  reaction  will  be  in  proportion  to  the 
vastness  of  the  conflict,  the  appalling  extent 
of  the  bloodshed,  the  wide  sweep  of  its 
devastation.  Men  will  not  turn  readily  from 
this  to  the  piling  up  of  a  preparation  for  the 
next  war.  Yet  if  the  old  rivalries  and  the 
old  fears  continue  to  dominate  the  outlook 
of  nations,  what  else  is  there  for  them  to  do  ? 

Here  surely  there  is  an  opportunity  for 
constructive  statesmanship,  a  call  upon  the 
wisdom  of  the  nations  which  must  receive 
its  response  if  we  are  not  to  confess  the  total 
bankruptcy  of  civilisation.  Mr.  Balfour,  in  his 
speech  at  Bristol  on  December  12, 1914,  asked: 
"  Was  it  not  essential  that  we  should  come 
to  an  understanding  as  to  how  international 
relations  were  to  be  conducted  ?  "  l  It  is  a 
pertinent  question.  We  have  seen  the  results 
of  not  knowing.  Only  by  learning  "how" 
shall  we  escape  a  repetition  of  these  results. 

We  have  seen  that  behind  all  the  super- 

1  Reported  in  Times,  December  13,  191 4. 


262  THE   EUROPE   OF   TO-MORROW 

ficial  causes  of  the  war  there  lay  that  doctrine 
of  the  necessary  rivalry  of  nations,  of  the  law 
of  struggle,  which  is  indeed  the  root-cause 
of  all  war,  as  it  is  the  foundation  of  the  mili- 
tarist philosophy  against  the  exponents  of 
which  we  are  fighting.  In  his  speech  already 
quoted  Mr.  Balfour  laid  his  finger  on  the  fatal 
flaw  in  that  philosophy  :  "It  was  absolutely 
inconsistent  with  the  true  notion  of  a  great 
community  of  nations."  l  It  is  the  denial  of 
this  community  of  nations  which  has  given 
us  the  whole  system  of  conquest  and  domina- 
tion, of  mutual  fear  and  suspicion,  of  armed 
rivalry  and  aggression,  which  led  to  the  pre- 
sent war.  If  we  are  to  avoid  a  repetition  of 
the  catastrophe,  we  must  recognise  the  exis- 
tence of  this  community — a  community  based 
on  common  civilisation,  on  commercial  inter- 
dependence, on  intellectual  contacts,  and 
above  all  on  common  interest  in  peace  and 
the  security  of  national  independence.  To 
come  back  to  the  hypothesis  of  our  first  chap- 
ter, we  must  consider  international  relations 
in  the  light  of  a  conception  of  human  society 
based  not  on  struggle  but  on  co-operation. 

Such  a  conception,  translated  into  the  field 
of  politics,  involves  in  Mr.  Asquith's  words  : 

1  Reported  in  Times,  December  13,  191 4. 


THE  TRIPLE  ALLIANCE  AND  THE  TRIPLE  ENTENTE     263 

The  substitution  for  force,  for  the  clash  of  conflicting 
ambitions,  for  groupings  and  alliances,  and  a  precarious 
equipoise,  the  substitution  for  all  these  things  of  a  real 
European  partnership,  based  on  the  recognition  of  equal 
rights  and  established  and  enforced  by  a  common  will.1 

The  first  practical  step  towards  giving  ex- 
pression to  this  recognition  of  a  community 
of  nations  is  hinted  at  in  Sir  Edward  Grey's 
despatch,  quoted  above.  He  suggests  as  the 
object  of  his  endeavours  "  some  arrangement 
to  which  Germany  could  be  a  party,  by 
which  she  could  be  assured  that  no  aggressive 
or  hostile  policy  would  be  pursued  against 
her  or  her  allies  by  France,  Russia,  and  our- 
selves, jointly  or  separately."  The  idea  had 
for  some  time  been  entertained  in  quarters 
of  very  great  weight  and  experience  that 
the  most  hopeful  solution  of  the  European 
problem  would  be  found  in  a  definite  rap- 
prochement of  the  Triple  Alliance  and  the 
Triple  Entente.  If  the  two  groups,  each  pro- 
viding for  the  co-operation  of  three  great 
States,  could  be  brought  together,  there 
would  be  an  effective  organisation  of  the 
Concert  of  Europe  which  would  render  the 
peace  of  the  world  more  secure  than  at  any 
previous  period   of    its   history    and    would 

1  At  Dublin.     Reported  in  Times,  September  lG,  191 4. 


264  THE   EUROPE   OF   TO-MORROW 

necessarily  imply  a  marked  relaxation  in  the 
competition  of  armaments. 

It  is  in  this  idea  that  we  may  hope  to  find 
the  solution  of  the  greatest  of  all  the  pro- 
blems of  the  settlement.  The  end  of  the  war 
will  find,  upon  the  one  side,  an  alliance  em- 
bracing Great  Britain,  France,  Russia,  Bel- 
gium, Serbia,  and  Japan  ;  possibly  Italy  and 
Roumania — an  alliance  cemented  by  loyal 
co-operation  in  a  gigantic  task  and  by  great 
sacrifices  cheerfully  shared  in  pursuance  of  a 
great  ideal.  On  the  other  side  will  be  Ger- 
many and  Austria,  stripped  probably  of  all 
or  many  of  the  provinces  which  they  have 
dominated,  but  retaining  their  national  in- 
tegrity and  freed,  by  their  very  losses,  from 
their  gravest  sources  of  unrest.  The  most 
acute  questions  of  European  controversy  will, 
we  may  hope,  have  been  settled  upon  natural 
and  therefore  upon  permanent  lines.  There 
will  remain  only  the  fear  by  the  Allies  of  a 
German  revenge  and  by  the  Germans  of  an 
aggressive  use  of  the  Allies'  predominant 
power.  An  attempt  by  the  Allies  to  secure 
peace  by  imposing  a  one-sided  limitation  of 
armaments  upon  Germany  would  be  fore- 
doomed to  failure  and  is  not  likely  to  be  seri- 
ously considered  by  practical  statesmen,  how- 


A   EUROPEAN    ALLIANCE  265 

ever  it  may  appeal  to  amateur  politicians. 
Any  proposal  put  forward  for  limitation  by 
agreement  will  be  countered  by  the  German 
military  party  with  an  appeal  to  Teutonic  fear 
of  the  Slav  menace.  Yet  both  sides  will  be 
exhausted  by  the  struggle  and  longing  for 
peace.  Is  there  any  reason  why  the  Allies, 
having  crushed  the  German  attempt  to  secure 
predominance  in  Europe,  should  not  offer  them 
admission  into  an  alliance  of  all  the  European 
States,  a  community  of  the  nations  based  on 
those  principles  of  national  liberty  and  public 
right  for  which  we  have  been  contending  ? 

It  is  hardly  conceivable  that  such  an  offer 
should  be  rejected  by  the  defeated  Powers. 
So  long  as  the  present  Alliance  against  them 
remains  intact,  the  idea  of  improving  their 
position  by  a  war  of  revenge  must  remain  at 
best  the  wildest  of  gambles,  even  if  the  bitter 
lessons  of  the  war  have  not  disillusioned  them 
as  to  the  advantages  of  a  policy  based  on 
sheer  force.  The  hope  of  world-empire  is 
lost  to  them.  The  parties  which  have  always 
opposed  this  vain  dream  of  the  military  clique 
will  have  been  strengthened.  On  the  other 
hand,  the  Alliance  would  offer  them  protec- 
tion against  any  fear  that  the  military  victory 
of  the  Allies  would  be  followed  by  a  policy 


266  THE   EUROPE   OF   TO-MORROW 

of  aggression  on  their  part.  It  would  secure 
to  the  Germans,  as  it  would  secure  to  the 
British,  to  the  Belgians,  or  to  the  French, 
their  national  independence,  freedom  to  pur- 
sue their  own  path,  to  develop  their  own 
national  institutions  and  culture  and  com- 
merce, undisturbed  by  the  haunting  fear  of 
invasion  and  subjugation. 

In  order  that  such  an  alliance  should  form 
a  real  assurance  of  security  not  only  to  the 
Germans  but  to  the  nations  recently  in  arms 
against  them,  it  should,  logically,  be  the  sub- 
ject of  a  definite  treaty,  embodying  a  joint 
and  several  guarantee  by  all  the  contracting 
Powers  of  the  independence  and  security  of 
each.  An  act  of  aggression  by  any  one 
Power  would  thus  not  merely  place  it  in  the 
position  of  violating  its  own  pledges,  but 
would  constitute  a  causa  foederis  justifying 
joint  action  by  all  the  remaining  Powers.  It 
would  be  at  the  option  of  these  Powers  to 
delegate  military  action  to  those  most  im- 
mediately concerned  or  most  favourably  situ- 
ated, but  the  aggressor  could  look  to  none 
of  them  for  support  or  even  for  neutrality. 
By  an  attack  upon  any  member  of  the  Con- 
federation he  would  in  fact  be  defying  the 
united  strength  of  Europe. 


THE    ADVANTAGE   OF   DELAY  267 

Any  absolute  guarantee  would  probably  be 
limited  to  the  actual  independence  and  terri- 
torial integrity  of  the  respective  States.  No 
pledge  could  or  should  be  given  to  support 
the  authority  of  an  existing  government  over 
any  section  of  its  subjects  whom  it  had  failed 
to  assimilate  and  who  desired  to  transfer  their 
allegiance.  There  would  be  no  repetition  of 
that  policy  of  intervention  in  internal  affairs 
which  was  the  aim  of  the  Holy  Alliance.  But 
the  mutual  guarantee  of  territorial  integrity 
against  forcible  conquest  would  go  far  to 
assure  the  peace  of  Europe.  States  would 
not  arm  themselves  for  the  conquest  of  pro- 
vinces which  they  could  only  retain  with  the 
consent  of  the  inhabitants.  Other  causes  of 
quarrel,  however,  would  remain  ;  and  in  many 
cases  it  would  be  difficult  to  decide  which 
party  was  in  fact  the  aggressor.  A  guarantee 
by  which  each  Power  was  compelled  to  take 
up  arms  against  the  aggressor  might  very  well 
divide  Europe  into  two  hostile  camps.  To 
meet  such  cases  it  should  be  possible,  without 
resort  to  an  elaborate  constitution,  to  devise 
some  simple  machinery  for  conciliation  and 
delay.  Refusal  to  submit  a  case  for  discus- 
sion by  representatives  of  the  Powers,  or  to 
accept  proposals  for  mediation,  would  consti- 


268  THE   EUROPE   OF   TO-MORROW 

tute  a  causa  foederis  compelling,  or  at  least 
justifying,  joint  action.  The  desire  to  get  in 
the  first  blow  which  has  contributed  more 
than  anything  else  to  render  a  pacific  settle- 
ment of  disputes  impossible  would  thus  be 
counteracted  by  the  fear  of  setting  in  motion 
the  whole  forces  of  the  Alliance  against  a 
recalcitrant  Power.  There  are  few  disputes 
which  would  prove  incapable  of  compromise 
if  a  period  of  consideration  could  be  secured  ; 
and  if,  on  occasion,  all  attempts  at  concilia- 
tion should  fail,  no  State  which  had  rejected 
them  could  look  for  help  to  any  member  of 
the  alliance. 

It  will  be  objected  that  treaties  as  definite 
and  guarantees  as  solemn  have  in  the  past 
been  torn  up  or  disregarded  and  that  the 
mutability  of  alliances  is  a  commonplace  of 
history.  To  this  it  might  be  replied  that  the 
action  of  the  Allies  in  the  present  war  has 
afforded  a  lesson  not  likely  to  be  forgotten  of 
the  risks  involved  in  assuming  that  civilised 
Powers  will  fail  to  act  up  to  their  engagements. 
But  the  real  answer  to  this  objection  goes 
much  deeper  than  this  very  obvious  retort. 

Alliances  in  the  past  have  been  limited  in 
their  scope  to  an  association  of  a  number  of 
Powers  for  the  attainment  of  certain  definite 


A   PRECARIOUS   EQUIPOISE  269 

ends  or  for  mutual  protection  against  some 
definite    danger    apprehended   from   a   rival 
group.     They  have  been,  in  fact,  the  instru- 
ments of  a  mutable  and  uncertain  policy  for 
the  pursuit  of  temporary  advantage.     Behind 
all  the  alliances  and  treaties  there  has  been 
the    conception    of    a    perpetual    rivalry    of 
nations,  imposing  the  necessity  of  creating  an 
artificial  and  precarious  balance,  by  playing 
off  Power  against  Power  and  group  against 
group.     At   any   moment   a   shifting   of   the 
European  equilibrium  or  the  emergence  of 
some  new  source  of  discord  might  change  the 
whole  face  of  politics  and  upset  the  unstable 
equipoise    of   the  Powers.     So   long   as   the 
nations  of   Europe  were   divided  into  rival 
groups,  conscious,  even  in  times  of  the  most 
profound  peace,  of  a  latent  struggle  for  mas- 
tery, no  group  could  consider  its  margin  of 
safety  certain.     Hence  the  perpetual  shifting 
of  alliances  and  ententes  by  which  the  various 
governments  sought  to  attach  themselves  to 
the  group  which  for  the  moment  seemed  the 
stronger,  or  to  counterbalance  the  predomin- 
ance of  a  rival.     Hence,  too,  the  doctrine  of  an 
overmastering  necessity  which  subordinated 
even  the  sanctity  of  treaties  to  the  instinct  of 
self-preservation. 

19 


27O  THE   EUROPE   OF   TO-MORROW 

But  with  the  merging  of  all  the  groups  in 
a  European  alliance  based  upon  the  one  great 
common  interest  of  security,  the  cause  under- 
lying these  shifts  and  changes  of  policy  would 
disappear.  The  protection  afforded  to  each 
Power  by  a  faithful  observance  of  the  treaty 
by  all  the  contracting  Powers  would  be  in- 
comparably greater  than  could  be  obtained 
under  the  old  conditions  by  any  manipulation 
of  the  balance.  The  advantage  of  enjoying 
this  security  and  the  risk  involved  in  an  act 
of  treachery  to  the  alliance  would  both  be 
out  of  all  proportion  to  any  advantage  which 
could  be  anticipated  from  successful  aggres- 
sion. Thus,  in  the  case  of  each  Power,  the 
motives  prompting  good  faith  would  be  far 
stronger  than  any  temptation  to  bad  faith 
which  could  be  offered.  It  would  be  in  the 
power  of  the  alliance  at  any  moment  to  bring 
diplomatic  and  economic  pressure  to  bear 
upon  a  recalcitrant  member  which  would,  of 
itself,  probably  obviate  the  necessity  for  re- 
course to  arms.  Even  if  we  assume  the 
possibility  of  a  State  which  contemplated 
aggression  intriguing  with  others  to  join  it  in 
tearing  up  the  treaty,  the  advantages  to  each 
Power  of  its  preservation  would  almost  cer- 
tainly prevent  the  formation  of  a  minority 


GERMAN    FEAR   OF   RUSSIA  27I 

group  strong  enough  to  defy  the  community 
with  any  hope  of  success.  The  whole  weight 
of  inertia,  the  instinct  of  self-preservation, 
would  be  thrown  upon  the  side  of  peace  and 
reinforced  by  a  weight  of  moral  sanction,  a 
tangible  embodiment  of  the  public  conscience, 
which  even  the  boldest  would  hesitate  to 
violate. 

We  may  therefore  say  that  such  an  alliance 
would  offer  to  Germany  a  real  security  against 
that  Russian  peril  which  has  been  the  trump 
card  in  the  hands  of  her  militarist  party  and 
in  which  the  mass  of  her  people  genuinely 
believe.  The  peril  may  be  and  probably  is 
largely  imaginary,  but  the  actions  of  nations, 
as  of  individuals,  are  guided  by  their  beliefs, 
and  this  belief  is  perhaps  not  more  baseless 
than  others  which  have  before  now  dominated 
the  policies  of  great  Powers  and  plunged 
Europe  into  disastrous  wars. 

It  may  be  said  that  it  is  not  our  business 
to  secure  Germany  against  phantom  dangers 
or  to  consider  the  susceptibilities  of  those 
who  have  disregarded  so  ruthlessly  the  rights 
of  others.  But  practical  statesmen  cannot 
afford  themselves  the  luxury  of  treating  with 
contempt  the  fears  of  a  powerful  nation. 
Whatever    disaster   the    German    arms   may 


272  THE   EUROPE   OF   TO-MORROW 

suffer,  there  will  remain  some  eighty  millions 
of  German-speaking  people.  Unless  we  can 
show  them  some  more  excellent  way  of 
achieving  security  we  may  be  faced  by  the 
menace  of  these  eighty  million  people,  not 
merely  animated  by  resentment,  but  rendered 
desperate  by  fear — and  recent  acts  of  the 
German  Government  afford  a  striking  ex- 
ample of  the  psychology  of  panic — working 
with  all  the  energy  and  tenacity  of  which 
they  have  shown  themselves  capable  to  re- 
establish their  position.  Such  a  menace 
would  impose  upon  the  Allies  the  necessity  for 
counter-preparations.  We  should  be  faced 
with  a  certain  continuance  of  the  armament 
competition  and  the  possibility  in  ten,  fifteen, 
or  twenty  years'  time  of  a  renewal  of  the 
struggle.  To  avert  this  is  surely  a  worthy 
object  of  statesmanship. 

It  is  not,  however,  merely  for  the  preserva- 
tion of  their  own  safety  and  interests  that  the 
Allies  are  fighting  in  this  war.  They  are 
fighting  also  for  the  liberties  of  the  small 
States,  and  a  settlement  which  left  these 
liberties  insecure  would  not  be  accepted  as  a 
satisfaction  of  their  declared  aims.  There 
are  two  ways  in  which  these  rights  might  be 
provided    for.     In    the    first    place,    having 


THE  FUTURE  OF  THE  SMALL  STATES    273 

regard  to  the  extent  of  the  common  interest 
in  the  security  of  the  peace  of  Europe  against 
disturbance,  it  might  be  found  desirable  to 
extend  the  causa  foederis  to  an  act  of  aggres- 
sion against  any  recognised  European  State. 
In  the  second  place,  there  seems  to  be  no 
reason  why  the  small  States  should  them- 
selves be  excluded  from  direct  participation. 
It  is  not  clear  that  it  would  be  desirable 
for  the  members  of  the  alliance  to  be  greatly 
multiplied,  and  it  is  conceivable  that  its  in- 
clusion of  a  large  number  of  weak  and  unstable 
Powers  might  constitute  a  source  of  weakness 
rather  than  an  addition  to  its  strength.  There 
is,  however,  an  alternative  by  which  this 
difficulty  might  be  avoided.  In  speaking  of 
the  Balkan  States,  it  was  suggested  that  a 
revived  and  enlarged  Balkan  League,  founded 
on  an  equitable  settlement  of  existing  differ- 
ences, and  strengthened  by  the  expansion  of 
Serbia  and  Koumania  to  their  natural  boun- 
daries, might  form  a  stable  and  useful  element 
in  the  European  system.  It  is  by  no  means 
impossible  that  the  common  interests  of  the 
Scandinavian  Powers,  emphasised  by  the 
events  of  the  war,  may  result  in  the  formation 
of  a  Northern  Confederacy.  It  is  such  con- 
federations of  the  smaller  Powers,   unifying 


274  THE  EUROPE  OF  TO-MORROW 

their  interest  and  giving  increased  weight  to 
their  policies,  which  might  best  enable  them 
to  come  definitely  into  the  alliance  of  Europe. 
Where  such  confederations  are  impossible,  it 
would  perhaps  be  best  to  secure  the  liberties 
of  the  smaller  nationalities  by  neutralisation 
and  the  guarantee  of  the  Powers. 

The  suggestion  of  a  European  alliance  falls 
short  of  what  is  in  the  minds  of  many  earnest 
students  of  international  relations.  What 
they  have  in  view  is  nothing  less  than  the 
setting  up  of  a  United  States  of  Europe,  with  a 
permanent  council,  having  legislative  powers, 
an  international  tribunal  for  arbitrating  on 
all  disputes  between  the  States,  and  an  in- 
ternational army  or  police  to  enforce  the 
decisions  of  the  tribunal. 

The  practical  difficulties  in  the  way  of  any 
such  proposal  are  sufficiently  obvious.  How 
far  would  the  powers  of  the  Council  override 
the  sovereign  rights  of  States  ?  Would  any 
such  limitations  of  their  power  be  accepted 
by  the  governments  concerned  ?  On  what 
basis  would  representation  on  the  Council  be 
arranged  ?  Would  the  great  Powers  consent 
to  equal  representation  of  the  smaller  States  ? 
If  not,  how  could  the  smaller  States  be  pro- 
tected against  the  possible  tyranny  of  the 


DIFFICULTIES   OF   AN    INTERNATIONAL   COUNCIL      275 

great  Powers  ?  How  should  the  tribunal 
be  composed  ?  What  law  should  it  adminis- 
ter ?  Of  what  offences  should  it  take  cog- 
nisance ?  How  far  should  its  functions  be 
mediatory  ?  How  far  should  they  be  manda- 
tory ?  Would  it  be  possible  to  create  an 
international  force  capable  of  overcoming  or 
over-aweing  national  forces  ?  Would  such 
a  cosmopolitan  force  have  sufficient  cohesive 
power  ?  Could  the  contingents  of  States  in- 
terested in  any  dispute  be  relied  upon  to 
enforce  a  decision  of  the  Court  ?  What 
limitations  should  be  placed  on  national 
armaments  ?  Could  such  limitations  be  en- 
forced ?  These  and  many  other  questions 
rise  at  once  to  the  mind.  The  difficulties  of 
solving  them  and  the  possibilities  of  friction 
which  they  involve  are  obvious.  They  would 
be  great  indeed,  even  were  the  proposal  put 
forward  during  a  time  of  profound  peace. 
They  would  be  enormously  increased  if  it 
were  attempted  to  embody  them  in  the  settle- 
ment after  a  great  war.  No  constitution 
imposed  upon  Europe  by  force  could  hope  to 
be  permanent  ;  its  imposition  would  certainly 
be  desperately  resisted,  and  even  if  this  resis- 
tance could  be  overcome  the  result  would  be 
the  establishment  of  a  tyranny  rather  than 


276  THE   EUROPE   OF   TO-MORROW 

the  creation  of  a  free  community.  Sooner 
or  later  the  system  which  the  sword  had 
established  would  be  overthrown  by  the 
sword,  and  Europe  would  relapse  into  chaos. 
Indeed,  the  circumstances  would  be  most 
unfavourable  even  for  the  discussion  of  any 
elaborate  constitution.  It  would  be  almost 
impossible  to  avoid  the  appearance  of  dicta- 
tion in  any  proposals  put  forward  by  the 
Allies.  The  friction  which  would  inevitably 
arise  over  the  details  of  the  scheme  would  be 
accentuated  by  the  passions  aroused  by  the 
war.  Anything  like  unanimity  among  the 
nations  on  many  of  the  points  involved  would 
be  impossible  ;  and  anything  much  short  of 
unanimity  would  be  fatal  to  the  success  of 
the  project. 

There  is,  however,  a  fundamental  objection 
to  the  idea  of  putting  forward  such  schemes 
at  the  peace.  There  is  nothing,  perhaps, 
more  fatal  to  the  healthy  development  of 
political  institutions  than  prematurity.  In 
the  main  those  institutions  which  have  stood 
the  test  of  time  have  been  things  of  gradual 
growth.  The  British  Constitution,  evolved 
by  centuries  of  experiment  and  adaptation 
to  changing  circumstances,  has  shown,  de- 
spite  all  its  defects  and  inconsistencies,   a 


THE   EVOLUTION   OF   LAW  277 

stability  and  elasticity  denied  to  more  theoreti- 
cally perfect  systems  which  sprang  fully 
grown  from  the  brain  of  some  political  Zeus. 
The  more  difficult  the  problem  to  be  solved, 
the  more  complex  its  factors,  the  greater  is  the 
need  for  caution,  for  proceeding  step  by  step. 
Omissions,  in  the  political  field,  are  easier  to 
remedy  than  a  false  move ;  and  while  imperfect 
institutions  may  be  modified  by  the  process 
of  peaceful  change,  an  elaborated  system  which 
fails  to  stand  the  test  of  experience  usually 
requires  the  rough  remedy  of  revolution. 

If  we  examine  the  growth  of  law  and  order 
in  the  evolution  of  civilised  society,  we  shall 
find  that  in  every  case  the  community  has 
preceded  the  law,  and  the  law  has  preceded 
the  executive.  It  was  not  until  men  had 
learned  by  experience  and  had  come  to  value 
the  benefits  of  association  that  they  began 
to  devise  rules  for  the  conduct  of  the  society  ; 
it  was  not  until  those  rules  had  firmly  estab- 
lished themselves  as  an  expression  of  the 
common  will,  that  an  executive  was  created 
to  enforce  them.  Sir  Frederick  Pollock  has 
drawn  the  analogy  in  this  respect  between  the 
law  of  nations  and  the  civil  laws  : 

Certain  writers,  again,  for  the  most  part  in  England, 
have  assumed  that  the  law  of  nations  has  a  merely 


278  THE   EUROPE   OF   TO-MORROW 

fictitious  existence  because  it  lacks  a  cosmopolitan 
judicial  Court,  with  power  to  decree  execution  and  to 
enforce  the  decrees.  So  far  as  there  is  anything  more 
in  this  contention  than  a  dispute  about  verbal  defini- 
tions, it  seems  fit  to  be  considered  that  in  the  early 
history  of  all  systems  of  law  the  executive  power  at  the 
disposal  of  Courts  of  Justice  has  been  rudimentary. 
We  now  understand  that  civil  justice  was  originally 
rendered  only  by  virtue  of  the  parties  having  submitted 
to  be  bound  by  the  judgment  in  the  particular  case ; 
and  even  at  a  much  more  advanced  stage,  we  may  find 
Courts  which  have  an  elaborate  constitution  and  pro- 
cedure, but  no  compulsory  powers  at  all.1 

Sir  Frederick  goes  on  to  quote  as  a  classical 
example  the  society  of  Iceland  in  the  Middle 
Ages.  One  of  the  most  striking  features  of 
that  society,  as  depicted  in  the  Sagas,  was 
its  elaborate  and  complicated  legal  system. 
Yet  the  reader  is  struck  by  the  fact  that  this 
elaborate  system  of  law  was  evolved  by  a 
society  which  possessed  neither  a  centralised 
government  nor  an  executive  of  any  kind  ; 
which  had  been  founded  indeed  by  refugees 
from  the  attempt  to  introduce  a  centralised 
government  into  Norway.  The  validity  of 
the  law  depended  on  the  voluntary  consent 
of  the  independent  freeholders  ;  and  the  only 
power  which  could  enforce  the  law,  or  the 

1  The  Modern  Law  of  Nations  and  the  Prevention  of  War, 
in  The  Cambridge  Modem  History,  vol.  xii.  p.  713. 


THE    POWER    OF   OUTLAWRY  279 

decisions  of  a  freely  chosen  arbitrator,  was 
that  of  the  community  itself.  The  man 
who  defied  the  law  was  dealt  with  by  de- 
claring him  outlawed — by  depriving  him 
of  the  benefits  and  protection  of  associa- 
tion with  his  fellows.  We  have  only  to 
conceive  the  position  of  a  nation  which  was 
thus  treated  —  apart  altogether  from  the 
operations  of  military  force — to  see  how 
strong  a  sanction  the  community  of  nations 
could  create. 

It  is  true  that  international  law  has  hitherto 
exercised  only  a  very  partial  restraint  upon 
the  actions  of  States.  Yet  the  ameliorations 
which  it  has  introduced  into  the  conduct  of 
civilised  Powers  has  been  one  of  the  out- 
standing phenomena  of  history.  As  was  said 
by  Sir  Henry  Maine  : 

What  we  have  to  notice  is  that  the  founders  of  inter- 
national law,  though  they  did  not  create  a  sanction, 
created  a  law-abiding  sentiment.  They  diffused  among 
sovereigns,  and  the  literate  classes,  in  communities,  a 
strong  repugnance  to  the  neglect  or  breach  of  certain 
rules  regulating  the  relations  and  actions  of  States. 
They  did  this  not  by  threatening  punishments,  but  by 
the  alternative  and  older  method,  long  known  in  Europe 
and  Asia,  of  creating  a  strong  approval  of  a  certain 
body  of  rules.1 

1  Quoted  by  Sir  Frederick  Pollock,  op.  cit.  p.  711. 


280  THE   EUROPE   OF   TO-MORROW 

The  indignation  excited  by  breaches  of  inter- 
national law  in  the  past  few  months  is  itself 
an  indication  of  the  strength  which  this  "  law- 
abiding  sentiment "  has  attained. 

The  fact  that  international  law  has  not 
been  more  effective  in  preventing  crimes  com- 
mitted by  State  against  State  is  due  to  the 
fact  that  hitherto  no  real  and  acknowledged 
community  of  nations  has  existed.  So  long 
as  the  Powers  were  divided  in  precariously 
balanced  and  presumably  hostile  groups,  no 
such  community  was  politically  possible, 
though  every  year  has  added  to  the  strength 
and  realisation  of  intellectual  and  economic 
interdependence.  The  political  community 
was  rendered  impossible  also  so  long  as  States 
were  divided  into  those  which  represented 
genuine  national  units  and  those  which  were 
based  on  an  artificial  domination  of  one 
nationality  over  another.  An  alliance  of  all 
the  Powers,  based  on  a  previous  settlement 
of  those  questions  which  involve  national 
liberties  and  on  a  genuine  attempt  to  substi- 
tute agreement  for  force  in  the  decision  of 
colonial  and  economic  questions,  would  create 
for  the  first  time  a  real  international  com- 
munity. 

With  an  advance  so  great,  it  would  be  well 


ONE   STEP   AT   A   TIME  201 

to  be  content.  There  is  every  reason  to  be- 
lieve that  it  would  be  sufficient  of  itself  to 
secure  at  least  a  period  of  European  peace,  a 
period  which  should  suffice  for  the  creation 
of  a  sense  of  common  interests  and  common 
obligations  impossible  under  the  old  condi- 
tions. It  would  be  well  to  leave  the  perfect- 
ing of  international  law,  and  the  evolution  of 
whatever  machinery  of  councils  or  tribunals 
may  prove  to  be  desirable  for  its  enforcement, 
to  the  operation  of  these  forces.  We  may  be 
sure  that  the  community  of  nations,  once 
created,  will  evolve  for  itself  the  instrument 
of  its  common  will.  Any  attempt  to  devise 
these  instruments  at  the  present  stage  might 
create  friction  which  would  render  the  com- 
munity itself  impossible.  The  attempt  to 
impose  them  upon  unwilling  States  would 
certainly  stultify  the  whole  scheme.  If  it 
should  prove  impossible  to  effect  the  alliance 
of  all  Europe,  it  would  at  least  be  possible  to 
include  all  States  which  were  willing  to  come 
in  and  to  strive  for  such  an  entente  with  the 
remainder  as  would  facilitate  their  subse- 
quent admission. 

While  anything  in  the  nature  of  a  legislative 
council  would  belong  to  a  later  stage  of 
development,  the  formation  of    the  alliance 


282  THE   EUROPE   OF   TO-MORROW 

would  undoubtedly  imply  discussion  and  co- 
operation between  the  governments  of  the 
States  concerned.  A  consultative  council 
meeting  at  stated  periods  for  the  discussion 
of  affairs  affecting  common  interests  would  be 
free  from  the  objections  to  a  premature  at- 
tempt at  definite  organisation.  Even  if  no 
formal  council  were  created,  the  ordinary 
channels  of  political  intercourse  would  pro- 
vide sufficient  opportunity  for  co-operation 
to  emphasise  and  to  give  effect  to  the  feeling 
of  unity.  Fiscal  and  colonial  questions  would 
be  rendered  easier  of  adjustment.  Co-opera- 
tion in  the  formation  of  maritime  codes  and 
questions  of  international  trade  and  com- 
munication would  be  more  frequent  and  more 
effective.  The  laws  of  war,  the  rights  and 
duties  of  belligerents  and  neutrals,  might  be 
freed  from  the  vagueness  and  uncertainty 
which  at  present  surround  them  and  placed 
under  the  protection  of  the  alliance.  Above 
all,  mediation  and  arbitration  on  all  points  of 
dispute  would  be  facilitated.  A  consulta- 
tive council,  or  even  a  conference  of  delegates 
from  all  the  allied  Powers,  would  provide 
that  machinery  for  conciliation  which  has 
already  been  forecast.  While  the  present 
Hague  Tribunal  would  remain  open  to  States 


THE   LIMITATION   OF  ARMAMENTS  283 

desirous  of  submitting  their  differences  to 
arbitration,  the  obligations  of  the  alliance 
would  entail  at  least  the  submission  of  all 
disputes  for  discussion  by  such  a  council  or 
conference  before  the  commencement  of 
hostilities. 

The  very  formation  of  the  alliance  and  the 
security  of  its  guarantee,  combined  with  the 
disappearance  of  so  many  causes  of  friction, 
would  of  itself  lead  necessarily  to  a  slackening 
in  the  competition  of  armaments,  a  diminu- 
tion, possibly  tentative  at  first  and  gradual 
in  its  development,  but  capable  of  definite 
extension,  as  the  new  security  became  more 
and  more  appreciated.  But  the  opportunities 
given  by  the  consultative  council,  or  by  the 
co-operation  of  the  governments,  for  exchange 
of  programmes  and  discussion  of  policy  would 
almost  certainty  pave  the  way  for  definite 
agreements  as  to  limitation  of  armaments. 
The  Rush-Bagot  Treaty  for  practical  dis- 
armament upon  the  Great  Lakes,  under 
which  the  security  of  a  frontier  of  2,000  miles 
has  been  maintained  for  a  hundred  years  not 
by  mutual  preparation  for  war,  but  by 
mutual  preparation  for  peace,  would  pro- 
vide a  precedent  which  would  almost  cer- 
tainly be  followed  when  once  the  realisation 


284  THE   EUROPE   OF  TO-MORROW 

of  common  interests  had  begun  to  affect  the 
policies  of  the  Powers.  It  is  certain  that  any 
successful  attempt  to  remove  the  armament 
burden  must  be  found  along  these  lines,  and 
not  in  the  imposition  by  sheer  military  force 
of  one-sided  restrictions.  The  nations  of 
Europe  will  disarm  when,  and  only  when, 
they  are  convinced  that  great  armaments 
have  ceased  to  be  essential  to  their  security. 
Mention  of  the  Rush-Bagot  Treaty  reminds 
us  that  before  the  community  of  nations  can 
be  considered  complete  it  must  include  the 
extra-European  powers  of  the  civilised  world. 
The  present  war  has  revealed  very  clearly  to 
Americans  how  deeply  they  may  be  affected 
by  the  events  of  European  politics.  It  has 
revealed  no  less  clearly  how  deeply  the  Euro- 
pean nations  are  interested  in  the  opinions 
and  attitude  of  the  United  States.  The 
economic  and  intellectual  ties  which  bind 
together  the  Old  and  the  New  World  are 
every  day  growing  in  strength,  and  the  in- 
clusion of  America  in  the  alliance,  or  at  least 
a  definite  entente  between  the  European 
Powers  and  the  Government  of  Washington, 
would  add  greatly  to  its  value.  It  is  not 
likely  and  it  is  not  necessary  that  the  United 
States  Government  would  commit  itself  to 


THE    POWER   OF   AMERICA  285 

military  action  in  support  of  any  guarantees 
contained  in  the  Treaty.  But  it  is  impossible 
to  overlook  its  possibilities  of  economic  pres- 
sure. Organised  non-intercourse,  the  "  out- 
lawry "  of  a  recalcitrant  Power,  is  a  method 
which  has  never  yet  been  tried  on  any  con- 
siderable scale.  It  is  probable  that  it  could 
be  applied  with  tremendous  effect,  and  it  is 
certain  that  its  operation  would  be  immensely 
more  effective  if  America  were  to  become  a 
member  of  the  community. 

This,  then,  is  the  opportunity  of  the  Allies  : 
to  settle  upon  natural,  and  therefore  per- 
manent, lines  the  questions  which  have  for  so 
long  rendered  the  peace  of  Europe  precarious 
and  to  lay  the  foundation  of  a  community  of 
nations  which  may  ensure  to  all  alike  security 
and  peace.  Such  a  settlement  would  repre- 
sent the  victory  of  the  ideals  for  which  the 
Allies  are  fighting  over  the  ideals  which  re- 
sulted in  the  war.  It  would  replace  the 
theory  of  force  and  domination  as  the  ruling 
principle  of  international  politics  by  the  idea 
of  liberty  and  co-operation  ;  it  would  vindicate 
the  conception  of  public  right  and  of  the  free 
development  of  nationality ;  it  would  set 
free  for  the  great  work  of  social  progress  and 
20 


286  THE   EUROPE   OF   TO-MORROW 

the  development  of  civilisation  those  energies 
which  have  been  devoted  to  the  one  work  of 
preparation  for  war.  It  is  not  to  be  sup- 
posed that  these  results  would  be  accom- 
plished all  at  once  or  without  a  continuance 
of  wisely  directed  effort ;  yet  if  a  beginning 
can  be  made,  if  the  principle  can  be  estab- 
lished, we  may  look  forward  to  the  future 
with  hope.  More  important  than  any  definite 
result  which  may  be  achieved  at  the  peace  is 
the  spirit  in  which  we  approach  its  problems. 
To  accomplish  even  the  first  step  in  the  pro- 
gramme would  be  a  gain  which  would  out- 
weigh, from  the  point  of  view  of  the  Allies' 
own  national  interests,  any  advantages  to 
which  a  policy  of  selfish  opportunism  could 
look ;  for  it  is  the  common  interests  of 
civilisation  which  embody  the  vital  needs  of 
every  civilised  people. 

We  have  said  that  the  Utopia  of  to-day  is 
the  practical  politics  of  to-morrow.  It  will 
become  so  only  if  the  practical  politics  of 
to-day  are  animated  by  a  determination  to 
realise  the  Utopia  of  the  future.  The  work 
will  require  all  the  practical  ability,  the 
sanity,  the  knowledge  of  affairs  which  our 
statesmen  can  bring  to  bear  upon  it  ;  it  will 
require  also  imagination,  insight,  faith.     But 


THE    SPIRIT   OF    PROGRESS  287 

to  suppose  that  it  is  incapable  of  accomplish- 
ment, that  human  society  is  incapable  of 
rising  above  the  level  of  191 4,  would  be  to 
admit  the  failure  of  civilisation.  It  would 
imply  a  lack  of  faith  disgraceful  to  the  Chris- 
tian, a  distrust  of  human  wisdom  discreditable 
to  the  Rationalist. 


APPENDIX    A 


THE   RACE   QUESTION    IN   AUSTRIA-HUNGARY 
Table  I — The  Provinces 


Area  in 

Sq.  Miles. 

Population.i 

Character  of  Population. 

Austria  : 

Lower  Austria   . 
Upper  Austria   . 
Salzburg   . 
Styria 

Carinthia 

Carniola    . 

Coastland 

Tyrol  and 
Vorarlberg 

Bohemia 

Moravia    . 

Silesia 

Galicia 

Bukovina 

Dalmatia . 

7.658 
4,628 

2,763 
8,662 

3.989 

3.845 

3.078 

II, 3*2 

20,065 

8,584 
1,988 

30,321 

4,033 
4.956 

3.53I.8I4 
853,006 

214.737 
1.444- 157 

396,200 
525.995 
893.797 

1,092,021 

6,769.548 
2,622,271 

756,949 
8,025,675 

800,098 

645,666 

Practically  entirely  German. 

Practically  entirely  German. 

Practically  entirely  German. 

Two-thirds    German  ;      one- 
third  Slovene. 

Nearly    three-quarters    Ger- 
man ;  remainder  Slovene. 

Almost  entirely  Slovene  ;    a 
few  Germans. 

About    45%     Italian,     30% 
Slovene,  20%  Serbo-Croat ; 
a  few  Germans. 

Tyrol — about  55%   German, 

45%  Italian. 
Vorarlberg — entirely  German. 

Two-thirds  Czech,   one-third 
German. 

About     70%     Czech,     30% 
German. 

Nearly  half  German,  a  third 
Polish,  the  rest  Czech. 

Nearly   half    Polish  ;     about 
40%    Ruthenian  ;     a    few 
Germans. 

About  40%  Ruthenian,  35% 
Roumanian  ;   the  rest  Ger- 
mans, Poles  and  Magyars. 

Serbo-Croat,     except    about 
3%  Italians. 

115,882 

28,571,934 

Hungary  : 

Hungary  Proper 

Croatia-Slavonia 

109,188 
16,421 

18,264,533 
2,621,954 

54  "5%  Magyars.     Sec  Table 

111. 
About  100,000  Magyars  ;  the 

rest  Serbo-Croat. 

125,609 

20,886,487 

Bosnia-Herzgovina 

19.768 

1,898,044 

Serbo-Croat. 

1  Census  of  1910. 
289 


2  go 


APPENDIX    A 


Table  II — The  Races  of  Austria 
(On  basis  of  language,  1910  Census) 


Germans 

9,950,266 

In  Lower  Austria,  Upper  Austria, 
Salzburg,  Styria,  Carinthia,  Bo- 
hemia, Moravia,  Silesia,  the  Tyrol 
and  Vorarlberg  ;  also  scattered  in 
other  provinces. 

Czecks  and  Slovaks 

6,435.983 

In  Bohemia  and  Moravia.  A  few  in 
Silesia  and  Lower  Austria. 

Poles 

4,967,984 

Chiefly  in  Galicia,  a  few  in  Silesia. 

Ruthenes 

3.518,854 

In  Galicia  and  Bukovina. 

Slovenes 

1,252,940 

Chiefly  in  Carniola  and  Styria  ;  also 
in  Coastland  and  Carinthia. 

Serbs  and  Croats  . 

783.334 

In  Dalmatia  and  the  Coastland. 

Italians 

768,422 

In  Tyrol  and  Coastland  ;  a  few  in 
Dalmatia. 

Roumanians 

275,  "5 

Practically  all  in  Bukovina. 

Magyars 

10,974 

Others . 

608,062 

28,57I>934 

Table  III — The  Races  of  Hungary 
(Basis  of  language,  1910  Census) 


Magyars 

Germans 

Croats.     1,833,1621 

Serbs.       1,106,471/ 

Roumanians 

Slovaks 

Ruthenes 

Others 


10,050,575 
2,037,435 
2,939.633 

2,949.032 

1,967,970 

472,587 
469,255 

20,886,487 


/Tn  Croatia-Slavonia  and'in  the  Banat 

t     and  Southern  Counties. 

In  Transylvania  and  the  Banat. 

In  the  Northern  Counties. 


APPENDIX  B 

THE   FRANCO-GERMAN   WAR   INDEMNITY 

Since  the  outstanding  historical  instance  of  a 
war  indemnity  on  a  large  scale  is  that  paid  by  France 
to  Germany  after  the  war  of  1870-71,  it  may  be  of 
interest,  in  connection  with  the  general  discussion 
of  the  indemnity  question  in  Chapter  VI,  to  give 
some  particulars  with  regard  to  that  transaction. 
The  available  information  on  this  subject  has 
recently  been  summarised  by  Mr.  II.  H.  O'Farrell 
in  an  excellent  monograph  '  from  which  the  following 
data  concerning  the  payment  and  expenditure  of 
the  indemnity  are  taken  by  courtesy  of  the  author, 
and  to  which  those  who  wish  to  follow  up  the  subject 
are  referred. 

The  amount  of  the  indemnity,  it  will  be  remem- 
bered, was  five  milliards  of  francs  (£200,000,000). 
It  was  stipulated  that  it  should  be  paid  by  fixed 
instalments  covering  a  period  of  three  years,  during 
which  a  German  army  was  to  remain  in  occupation 
of  a  considerable  portion  of  French  territory. 

1  The  Franco-German  War  Indemnity  and  its  Economic 
Results,  by  Horace  Handley  O'Farrell.    (Harrison  it  Sons.) 

291 


292  APPENDIX   B 

The  losses  of  Germany  through  the  war,  direct 
and  indirect,  were  estimated  by  Sir  Robert  Giffen 
at  about  £115,000,000  (of  which  some  £25,000,000 
were  charged  to  revenue),  thus  showing  an  apparent 
capital  gain  to  Germany  in  the  neighbourhood  of 
£100,000,000.  The  indemnity  was  thus  designed  not 
merely  to  recoup  the  war  expenditure  of  the  con- 
querors, but  to  provide  them  with  a  profit  and  to 
weaken  the  vanquished  State.  Mr.  O'Farrell  points 
out  that  the  conditions  of  payment  were  designedly 
rendered  onerous.  The  instalments  were  required 
to  be  paid  on  the  exact  dates  when  they  became 
due,  neither  delay  nor  prepayment  being  allowed. 
They  were  to  be  paid  in  German  coin  or  in 
bullion  ;  but  English,  Prussian,  Dutch,  or  Belgian 
banknotes  or  first-class  commercial  bills  might 
be  provisionally  accepted.  The  latter,  however, 
did  not  constitute  a  definite  payment  until  their 
value  had  been  realised  and  converted,  at  the 
cost  of  the  French  Government,  into  German 
currency. 

Interest  at  5  per  cent.,  payable  annually  in  ad- 
vance, was  exacted  on  the  last  three  milliards,  sub- 
ject to  the  right,  under  certain  conditions,  to  ac- 
celerate the  final  payment.  The  French  Govern- 
ment took  advantage  of  this  privilege,  and  the 
whole  indemnity  was  paid  off  on  September  5,  1873 
— just  twenty-seven  months  after  the  date  of  the 
first  payment,  made  on  June  1,  1871. 

The  total  cost  to  France,  including  interest  and 
expenses  of  collection  and  transmission,  amounted 


APPENDIX   B  293 

to  about  £212,645,000.  The  whole  was  discharged 
in  cash,  or  its  equivalents,  with  the  exception  of 
a  sum  of  £13,000,000  which  the  German  Govern- 
ment agreed  to  allow  as  the  value  of  the  railways 
taken  over  in  Alsace-Lorraine.  It  should  be  ob- 
served, however,  that  these  railways  were  privately 
owned  and  that  inasmuch  as  the  French  Govern- 
ment was  obliged  to  acquire  them  by  purchase, 
the  transfer  of  the  lines  to  Germany  did  not  reduce 
the  burden  imposed  by  the  indemnity  on  the  French 
nation. 

As  a  matter  of  fact,  only  a  comparatively  small 
portion  was  paid  in  coin  or  bullion.  The  greater  part 
of  the  instalments  was  discharged  by  the  transmis- 
sion of  commercial  bills.  These  were  purchased 
by  the  French  Government  or  its  agents  in  foreign 
countries,  in  the  open  market.  In  the  case  of  some 
£28,000,000  of  the  second  loan,  a  syndicate  of  Euro- 
pean bankers  acted  as  intermediary  in  the  purchase 
of  the  bills. 

It  will  be  remembered  that  the  conversion  of 
bills  which  were  not  expressed  in  Germany  currency 
was  to  be  effected  at  the  expense  of  the  French 
Government.  This  expense,  in  the  case  of  the  first 
two  milliards,  amounted  to  over  half  a  million  ster- 
ling, and  in  discharging  the  later  instalments  the 
French  government  evaded  the  greater  part  of  this 
expense  by  purchasing  bills  on  Germany  with  the 
proceeds  of  non-German  paper,  so  that  88  per  cent, 
of  the  last  three  milliards  was  in  German  legal 
tender. 


2g4 


APPENDIX   6 


The  payment  of  the  indemnity  is  summarised  by 
Mr.  OTarrell  as  follows  : 


German  notes  and  coin  collected 
in  France  after  the  war 

French  gold  and  silver    . 

French  bank-notes  accepted  by 
Germany  as  a  matter  of  favour 

Total  coin  and  notes 
Bills  on  Germany  . 
Bills  on  other  countries  . 

Total  bills 
Value  of  Alsace-Lorraine   rail- 
ways allowed  in  account 

Grand  Total     . 


i 

4,201  ,ooo 
20,492,000 

5,000,000 
122,614,000 

47.338.000 


29,693,000 

169,952,000 

13,000,000 
£2 1 2,645,000 


The  funds  required  by  the  French  Government 
for  the  discharge  of  the  indemnity  were  raised  by 
means  of  three  great  loans,  the  first  of  which,  amount- 
ing to  £61,200,000,  was  obtained  from  the  Bank  of 
France,  while  the  other  two  were  raised  by  public 
subscription.  The  actual  amounts  so  subscribed 
were,  in  round  figures,  £89,000,000  and  £140,000,000. 
The  whole  of  the  loan  from  the  Bank  of  France, 
about  72  per  cent,  of  the  first  public  loan  and 
about  86  per  cent,  of  the  second,  were  applied 
to  payment  of  the  indemnity.  The  interest  on 
the  instalments  was  charged  to  the  budgets  of 
1872  and  1873.  Mr.  O'Farrell  notes  the  singular 
fact  that  the  largest  percentage  of  foreign  sub- 
scriptions to  the  second  public  loan  came  from 
Germany  and  was  no  less  than  33  per  cent. 


APPENDIX    B  2Q5 

On  the  general  question  of  payment  of  the  in- 
demnity he  remarks  : 

The  transfer  of  this  huge  sum  from  the  one  country  to 
the  other  involved  banking  operations  of  the  utmost  diffi- 
culty and  delicacy,  which  at  the  outset  appeared  likely 
to  impair  French  credit  and  throw  the  international  mone- 
tary system  into  confusion.  Thanks,  however,  to  the  able 
management  of  the  French  treasury  officials  and  bankers, 
and  to  the  hitherto  unapprehended  strength  and  close 
interrelation  of  the  money-markets  of  Europe,  the  trans- 
actions were  carried  through  with  the  utmost  smoothness 
and  without  the  slightest  disturbance  of  international 
credit. 

Data  with  regard  to  the  manner  in  which  the 
indemnity  was  utilised  by  Germany  are  less  readily 
available  than  with  regard  to  the  methods  of 
payment  by  France.  It  appears  that  out  of 
£222,684,000  received  through  the  indemnity  and 
the  separate  contributions  levied  on  Paris  and  other 
large  cities,  some  £102,000,000  went  to  the  Imperial 
Government,  £96,525,000  to  the  North  German 
Confederation,  and  £23,334,000  to  the  other  German 
States. 

Part  of  the  amounts  thus  received  was  expended 
in  the  repayment  of  loans  which  had  been  raised 
at  disadvantageous  rates  for  the  conduct  of  the  war, 
the  debt  of  the  North  German  Confederation 
(£13,000,000)  being  thus  extinguished. 

Another  important  purpose  to  which  the  in- 
demnity was  applied  was  the  placing  of  the  German 
currency,  which  had  previously  been  based  on 
silver  of  diverse  denominations,  on  a  uniform  gold 


296  APPENDIX    B 

basis.  The  practical  difficulties  were  great,  but 
they  were  eventually  overcome,  and  the  conversion 
was  effected  at  a  cost  of  something  like  £4,000,000. 

In  order  to  provide  against  a  French  war  of 
revenge,  which  was  anticipated  in  Germany  as  soon 
as  the  German  troops  should  have  evacuated 
French  territory,  a  sum  of  £6,000,000  in  gold  was 
interned  in  the  fortress  of  Spandau.  An  addition 
was  made  to  this  deposit,  it  will  be  remembered, 
some  two  years  ago,  but  in  all  probability  the 
treasure-chest  has  by  this  time  been  emptied  for 
the  purposes  of  the  present  war. 

Of  the  amount  received  by  the  Imperial  Govern- 
ment, £1,200,000  was  devoted  to  the  erection  of 
buildings  for  the  Reichstag  and  about  £21,300,000 
to  railway  development  in  Alsace-Lorraine  and 
the  completion  of  the  Wilhelm-Luxembourg  line. 
The  sums  allotted  to  the  separate  States  are  be- 
lieved to  have  been  expended  mainly  in  repairing 
the  damages  resulting  from  the  war  and  for  military 
purposes  ;  and  of  that  allotted  to  the  North  German 
Confederation,  some  £20,000,000,  which  was  not 
specifically  appropriated,  may  have  been  expended 
on  objects  of  a  civil  nature.  The  bulk  of  the 
indemnity,  however,  appears  to  have  been  used 
for  military  purposes.  The  Pension  Fund  for  in- 
valid soldiers  and  the  amounts  devoted  to  fortifica- 
tion alone  absorbed  some  £40,000,000. 

Only  a  small  portion  of  the  funds  devoted  to 
military  purposes,  however,  could  be  immediately 
utilised  for  such  ends,  and  a  great  part  of  the  balance 


APPENDIX    B  297 

was  in  the  meantime  lent  at  interest  through  the 
agency  of  the  German  banks.  With  regard  to  these 
operations,  Mr.  O'Farrell  remarks  :  "  Much  con- 
temporary and  some  later  criticism  has  been  directed 
at  this  and  similar  loan  operations  of  the  German 
Government,  and  many  writers  have  held  it  re- 
sponsible for  the  disastrous  speculation  which 
ensued  later  and  culminated  in  crises  in  Austria 
and  Germany."  He  gives  reasons  for  doubting 
the  soundness  of  this  view  and  suggests  that  "  the 
concentration  of  these  large  sums  in  the  hands  of 
the  German  Government  merely  contributed  to 
increase  somewhat  the  severity  of  a  movement 
which  it  did  not  initiate."  He  considers  that  "  the 
funds  at  the  disposal  of  the  Government  appear  to 
have  been  judiciously  invested,  and  that  in  the 
opinion  of  influential  authorities  it  had  really  no 
option  in  the  matter  "  ;  and  quotes  the  Economist 
of  December  23,  1872,  which  wrote  :  "To  have 
cooped  up  the  French  indemnity  in  cash  would  have 
caused  a  financial  famine  and  financial  ruin  all 
through  Europe." 

Contemporary  opinion  thus  inclined  to  the  belief 
that  the  indemnity  payments  were  a  source  of 
economic  injury  to  the  recipient  nation  rather  than 
to  that  which  paid  them,  and  ingenious  theories 
were  advanced  to  explain  this  paradox.  Mr. 
O'Farrell  dissents  altogether  from  this  view,  and 
investigates  at  some  length  the  data  of  various 
kinds  available  for  estimating  the  economic  and 
financial  effects  of  the  indemnity  transaction  upon 


298  APPENDIX   B 

France,  Germany,  and  the  world  in  the  decade 
following  the  war.  His  conclusions,  on  the  whole, 
are  that  the  period  was  one  of  equal  recuperation 
for  both  countries  ;  and  that  the  depression  which 
Germany  experienced  was  purely  financial  and 
shared  by  her  with  practically  the  whole  of  the 
civilised  world,  east  and  west,  although,  of  course, 
the  extent  to  which  different  nations  were  affected 
by  world-wide  causes  naturally  varied  somewhat 
as  a  result  of  local  conditions.  France,  for  example, 
largely  escaped  the  full  force  of  the  financial  tem- 
pest, but  so  also  did  Spain  and  Italy ;  and  al- 
though it  has  been  suggested  that  the  comparative 
immunity  of  France  was  due  to  some  extent  to  the 
financial  effects  of  the  payment  of  the  indemnity, 
there  does  not  seem  to  be  any  valid  reason  for 
adopting  this  view. 

The  period  of  depression  which  the  world  in  general  was 
then  passing  through  was  evidently  due  to  this  sudden 
cessation  of  the  previous  over-production,  though  the 
European  speculation  and  the  building  mania  in  Berlin  in 
particular  had  been  doubtless  aggravated  by  the  popular 
delusions  connected  with  the  receipt  of  the  French  mil- 
liards, and  still  more  by  the  new  sense  of  security  which 
the  German  victories  had  legitimately  engendered.  France 
was  spared  the  full  effects  of  the  crisis,  partly  owing  to  the 
cautious  habits  of  the  people  in  general,  and  perhaps  be- 
cause the  floating  of  the  two  war  loans  had  absorbed  much 
French  capital  ;  but  also,  in  great  measure,  in  consequence 
of  the  recent  opening  of  the  Suez  Canal,  which  favoured  the 
trade  of  Marseilles,  and  directed  into  the  channels  of 
domestic  production  funds  that  would  have  otherwise 
found   an  outlet  in  foreign  enterprises.     The  same  cause 


APPENDIX    B  299 

would  also  seem  to  have  been  at  work  in  the  case  of  Italy, 
and,  in  a  lesser  degree,  of  Spain,  two  countries  which  pos- 
sessed Mediterranean  ports  and  have  already  been  men- 
tioned as  but  slightly  affected  by  the  prevailing  depression. 
In  any  case  the  recovery  of  France  from  the  effects  of 
the  war  would  probably  have  been  rapid.  Such  recovery, 
as  Mill  had  pointed  out  long  before  in  a  well-known,  but 
periodically  forgotten,  passage  of  his  Principles  of  Political 
Economy,  is  quite  a  common  phenomenon,  the  simple  ex- 
planation of  which  lies  in  the  perpetual  consumption  and 
reproduction  which  is  the  normal  condition  of  capital. 

He  then  quotes  Mill  as  follows  : 

What  the  enemy  have  destroyed — in  the  case  of  the 
indemnity  we  may  add  or  "appropriated" — would  have 
been  destroyed  in  a  little  time  by  the  inhabitants  them- 
selves :  the  wealth  which  they  reproduce  would  have 
needed  to  be  reproduced,  and  would  have  been  reproduced 
in  any  case,  and  probably  in  as  short  a  time.  Nothing  is 
changed,  except  that  during  the  reproduction  they  have 
not  now  the  advantage  of  consuming  what  had  been  pro- 
duced previously.  The  possibility  of  a  rapid  repair  of 
their  disasters  mainly  depends  on  whether  the  country 
has  been  depopulated.  If  its  effective  population  have  not 
been  extirpated  at  the  time  and  not  starved  afterwards  ; 
then,  with  the  same  skill  and  knowledge  that  they  had 
before,  with  their  land  and  its  permanent  improvements 
undestroyed,  and  the  more  durable  buildings  probably 
unimpaired  or  only  partially  injured,  they  have  nearly  all 
the  requisities  for  their  former  amount  of  production. 

The  view  that  the  indemnity  was  the  foundation 
of  the  prosperity  which  Germany  so  abundantly 
manifested  in  after  years  is  also  dealt  with  by  Mr. 
O'Farrell,  who  shows  that  the  importance  of  the 


300  APPENDIX   B 

French  milliards  in  the  so-called  "  fertilisation" 
of  German  industries  has  been  much  exaggerated, 
and  that  the  true  Grundjahre  were  not  the  ten 
years  that  followed  the  war,  but  the  twenty  that 
began  with  the  establishment  of  the  Zollverein. 


INDEX 


Adrianople,    Bulgarian   claims    to, 

135 
Adriatic,  Italy  and,  123-124,  126 
Albania,  problem  of,  125-127 
Alexander  I,  Tsar 
and  Holy  Alliance,  57 
his    scheme    for    a    remodelled 
Eumpe,  254 
Allen,  Mr.,   New  Zealand  Defence 
Minister,  on  expedition  to  Samoa, 
177 
Alliances  : 

mutability  of,  268-269 
See     also     "  Balkan     League," 
"Concert  of  Europe,"  "Dual 
Alliance,"  "Triple  Alliance" 
Allies  : 

objects  of  the,  44-45,  69-70 
settlement  must  be  agreeable  to 

all,  84 
the  opportunities  of,   163,   285- 

287 
principles  represented  by,   249- 

251 
Mr.  Churchill  on  objects  of,  256- 
257 
"  All-red    route,"     German     East 

Africa  and,  186-187 
Alsace-Lorraine  : 
annexation  of,  34-35 
effect  of  annexation  on  German 

policy,  56 
problem  of,  148-152 
Annexation.     See  "  Conquest  " 
Arabs.     See  "Turkey,  Asiatic  " 
Armaments  : 

as  a  means  of  averting  war,  6 
burden  of,  79,  251-253 
difficulties  of  limiting,  253-254, 

264 
disarmament   by   consent,    283- 
284 


Armenia.     See  "  Turkey,  Asiatic  " 
Asquith,  Mr.  : 

on  object  of  Allies,  78 
on  European  partnership,  263 
Australia,  Commonwealth  of,  and 
German  Pacific  Colonies,  188,  190 
Austria.     See  "  Austria-Hungary  " 
Austria-Hungary  : 
policy  of  and  responsibility  for 

war,  12 
ultimatum  to  Serbia,  18 
case  against  Serbia,  19,  20 
character  of  Empire,  20-24 
friction     between    Austria     and 

Hungary,  22 
policy    with    regard    to    Serbia, 

24-26 
attitude  of  European  statecraft 

to,  26 
a  menace  to  European  peace,  27 
Empire  based  on  force,  27,  64 
mandate   to  administer  Bosnia- 
Herzegovina,  27 
conflict   of  policy   with    Russia, 

28-30 
annexation      of     Bosnia-Herze- 
govina, 30 
not  included  in  Zollverein,  32 
and  the  outbreak  of  war,  39-40 
no  national  unity  in,  62 
racial  problems  of,  86-90 
annexes  Cracow,  94 
relations  with  Italy,  141-143 
position  of,  after  the  war,   156- 

158 
statistics  of,  289-290 
See  also  "Bohemia,"   "Bosnia- 
Herzegovina,"      "  Bukovina," 
"  Carinthia,"  "Carniola," 

"  Coastland,"  "  Dalmatia," 
"  Domination,"  "  Galicia," 
"Moravia,"  "  Polaud," 


21 


301 


302 


INDEX 


'  Southern  Slavs"    "Transyl- 
vania," "Trentino,"  "Trieste" 

Bagdad     Railway,     apprehensions 

excited  by,  199 
Balfour,  Mr.  A.  J.  : 

on  object  of  Allies,  70 

on  community  of  nations,   261, 
262 
Balkan  League  : 

break-up  of,  54,  133-134 

possible  revival  of,  136-138,  145, 

2  73 
Balkan    States-      See     'Albania," 
"  Balkan  League,"  "  Bulgaria," 
"Greece,"         "Montenegro," 
"  Roumania,"  "  Serbia  " 
Belgium  : 

German  invasion  of,  2 

sufferings  of,  3 

Flemings    and   Walloons   united 

in,  14,  21,  61-62 
German  strategic  railways  and, 

37-38 
pan-Germans  and,  38 
German  crimes  in,  44,  210 
suggested   union   of   Alsace   and 

Luxemburg  to,  152 
territorial  compensation  to,  153 
See  also  "  Indemnities  " 
Berlin,  Congress  of,  errors  of,  82 
Bessarabia,  Roumania  and,  129,  132 
Bismarck,  Prince,  his  policy,  32,  35, 

141 
Bismarck         Archipelago.  See 

"  Pacific,  German  Colonies  in  " 
Black  Sea,  Russia  denounces  treaty 

relating  to,  49 
Bohemia  : 

racial  problems  of,  109-110,  289 
future  of.     See  "  Czechs  " 
Bosnia-Herzegovina  : 

annexed  by  Austria,  26,  30 
Austrian  administration  of,  27- 

28 
character  of  population,  114,  289 
religions  in,  121 
See  also  "  Jugoslavia  " 
Botha,  General : 

and  German  South- West  Africa, 

183 
quoted,  184 
Brazil,  German  colonists  in,  198 
Britain.     See  "  Great  Britain  " 
British  Empire  : 
nature  of,  63-64,  166-167 


British  Empire : 

See     also      "Colonies,"      "Do- 
minions, British,"  "  India  " 
Bukovina,  racial  problems  of,  106, 
128,  289 
See  also  "  Roumanians,"  "  Ruth- 
enes  " 
Bulgaria : 

attacked  by  Serbia  in  1885,  25 
relations     with     other     Balkan 

States,  133-134 
and  question  of  Macedonia,  133- 

i35 
and  Thrace,  135,  138 

Cambon,  M.,  on  object  of  Allies,  78 
Cameroons.     See   "  Kamerun  " 
Canada,  British  and  French  united 

in,  14 
Carinthia  : 

racial  problems  of,  114,  289 

See  also  "Jugoslavia" 
Carniola  : 

racial  problems  of,  114,  289 

See  also  "  Jugoslavia  " 
Caroline     Islands.     See     "  Pacific, 

German  Colonies  in  " 
Castlereagh,  Lord  : 

on  principles  of  peace  in  1815,  53 

on  principles  of  the  Holy  Alliance, 
58 

and  abolition  of  the  slave-trade, 
80 
Churchill,  Mr.  Winston,  on  objects 

of  the  Allies,  256-257 
Cilicia.     See  "Turkey  Asiatic" 
Coastland  : 

racial  problems  of,  114,  146,  289 

See  also  ' '  J  ugoslavia, "  "  Trieste' ' 
Colonies  : 

as  spoils  of  war,  165 

Spanish     and     British     colonial 
policy,  166,  207 

agreement  between  Britain  and 
France  as  to,  168 

the  scramble  for  Africa,  169 

general  considerations  of  colonial 
policy,  191-195 

political  concession-hunting,  192- 

193 

co-operation    in    world-develop- 
ment, 194-195 

policy  of  exploitation,  205 

as  markets,  205 

value  of  tropical,  205-206 

British  policy  in  India,  207 


INDEX 


303 


Colonies : 

cannot  be  regarded  in  terms  of 
capital  value,  208 

See    also    "Colonies,    German," 
"Dominions,  British" 
Colonies,  German  : 

German     Colonial     policy     and 
Anglo-German  relations,  36-37 

extent  of,  164 

considerations  affecting  disposal 
of,  164-165 

history  of  acquisition  of,  168-170 

statistics  of,  170 

and  German  emigration,  171 

German  Colonial  policy,  171 

arguments   for    and   against  an- 
nexation of,  171-177 

Mr.  H.  S.  Egerton  on  annexation 
of,  172 

as  storehouses  of  raw  material, 

172-173 
as  naval  bases,  174-175 
strategic  reasons  for  operations 

against,  175-176 
the  British  Dominions  and,  176- 

177 
as  pledges  for  indemnity,  216 
See  also  "  German  East  Africa," 

"  German  South-West  Africa," 

"  Kamerun,"      "  Kiau-Chau," 

"  Pacific,  German  Colonies  in," 

"  Togoland  " 
Compensation  : 
for  breaches  of  laws  of  war  and 

destruction  of  private  property, 

243-244 
to  Belgium.     See  "  Indemnities  " 
Concert  of  Europe  : 

possibility  of  a  European  entente, 

78-80 
the     international     partnership, 

245-247 
services  of,  259 
Sir    Edward   Grey   on,   259-260, 

263 
Mr.    Balfour   on    community   of 

nations,  261,  262 
Mr.  Asquith  on  European  partner- 
ship, 263 
possible  organisation  of,   263   et 

seq. 
small  States  and,  272-274 
difficulties       of        Internationa] 

Council,  etc.,  274-276 
dangers  of  prematurity,  276-281 
United  States  and,  284-285 


Concessions.     See  "Colonies" 
Confederation  of  the  Rhine,  collapse 

of,  48 
Conquest  : 
motives  of,  8-9 
conquered  provinces  as  sources 

of  unrest,  55 
militarisation  of  conquerors,  55- 

56 
material  advantages  of,  200-207 
revenues  of  conquered  territory 

expended  locally,  201 
adds  to  military  power  of  con- 
queror, 202 
drawbacks  of,  202,  204 
control  of  raw  material,  203 
See  also  "Colonies,"  "Domina- 
tion " 
Constantinople,  problem  of,  138-141 
Co-operation  : 

doctrine  of,  13-15 
for  world  development,  194-195 
economic,  245-247 
Cracow,  Duchy  of  : 
guarantees  violated,  66 
annexed  by  Austria,  94 
Crimean  War,  motives  of,  139 
Croatia-Slavonia : 

racial  proolems  of,  114  et  seq.,  289 
See  also  "  Jugoslavia  " 
Croats.     See  "  Southern  Slavs  " 
Cromer,  Earl  of,  quoted,  201 
Culture  : 

conflicts  of,  8 

and  military  power,  9-10,  68-69 
Czechs  : 

in  Bohemia  and  Moravia,  109 
history  and  aspirations  of,  109- 

110 
future  of,  111-113 
relation  to  Slovaks,  113 
in  Austria-Hungary,  290 

Dalmatia  : 
racial  problems  of,  114,  123,  144, 

289 
Italian  interests  in,  123-125,  144- 

M5 
See  also  "  Jugoslavia  " 
Danzig,  and  the  new  Poland,  101- 

102 
Dardanelles.  See  "Constantinople" 
Denmark  : 

geographical  position  and    inde- 
pendence of,  63 
See  also  "  Schleswig-Holstein  " 


304 


INDEX 


De     Wet.     See     "  South     African 

Union  " 
Dobrudja  acquired  by  Roumania, 

129 
Domination  : 

policy  of,  8-1 1 

Germany    and    Austria    as    ex- 
ponents of,  12 

responsible  for  the  war,  41 
Dominions,  British  : 

British  policy  and,  166-167 

and  German  Colonies,  175-177 

and  proposal  for  Allied  Zollverein, 
238 

See   also    "  Australia,    Common- 
wealth  of,"    "  New   Zealand," 
"  South  Africa,  Union  of  " 
Dual  Alliance : 

formation  of,  35 

political  results  of,  36 

East  Prussia.     See  "  Poland  " 

Economics  : 

in  relation  to  policy,  244-247 
See     also     "Colonies,"      "Con- 
quest,"       "  Fiscal       arrange- 
ments," "  Indemnities  " 

Egerton,  Mr.  H.  S.,  on  annexation 
of  colonies,  172 

Egypt : 
work  of  Great  Britain  in,  194 
British  protectorate  of,  199  n. 

Epirus  and  Greece,  125-126 

Finland,  geographical  position  and 
political  relations  of,  63 

Fiscal  arrangements  : 

in  the  settlement,  233-234 

and   German  competition,   234- 

237 
Zollverein  of  the  Allied  Powers, 

235,  237-238 
discriminating  duties,  235,  236- 

237 
counter-bounties,  235,  239 
export  duty  on  German  manu- 
factures, 236,  240 
and  military  victory,  240-241 
and    territorial    rearrangements, 
241-242 
Fiume,  economic  relations  of,  158 
Force,  its  failure  to  enforcerespect,  69 
France  : 
not  crushed  by  fall  of  Napoleon,  4 
forms  Dual  Alliance  with  Russia, 
35 


France : 

entente  with  Great  Britain,  37 

Morocco  crisis,  38 

and  the  outbreak  of  war,  39~40 

rapid  recovery  from  defeat,  49 

protest    against    annexation    of 
Cracow,  94 

agreement  with  Great  Britain  as 
to  Colonies,  168 

interests  in  Syria,  196 

fear  of  Germany,  257 

See  also  "  Alsace-Lorraine  " 
French    Revolution   and    principle 

of  nationality,  60 

Galicia  : 

Poles    and  Ruthenes  in,  96-97, 

106,  289 
annexation  of,  by  Russia,  107 
future      of.       See      "  Poland," 
"  Ruthenes" 
German  East  Africa  : 
acquisition  of,  170 
description  of,  185-186 
future  of,  186-187 
German  South-West  Africa  : 
acquisition  of,  170 
description  of,  180-182 
future  of,  182-185 
See   also    "  South    Africa,    Com- 
monwealth of  " 
Germany  : 

recovery  after  Jena,  4 

policy  of,  and  responsibility  for 

war,  12 
supports  Austria  against  Russia, 

30 
unification  of,  31-33 
foreign     policy     controlled     by 

Prussia,  33 
moral  effects  of  war  of  1870  on, 

33-34 

subject  populations  of,  34 
annexation   of    Alsace-Lorraine, 

34-35 
diplomatic  conflict  with  Russia, 

36 
relations  with  Great  Britain,  36-39 
and  the  outbreak  of  war,  39-40 
can  Germany  be  crushed  ?  42-52 
military  defeat  of,  essential,  43 
Napoleon's  attempt  to  crush,  45- 

47 
renaissance  of,  47-49 
Times  military  correspondent  on 

impossibility  of  crushing,  50 


INDEX 


305 


Germanv  : 

cannot  be  dismembered,  51-52 
reforms  must  come  from  within, 

51-52 
position  after  the  war,  77,  157 
racial  problems  of,  90-91 
victory  would  be  disastrous  to, 

249 

fear  of  Russia,  257-258,  271 

future  of,  271-272 

See  also  "  Alsace- Lorraine," 
"  Colonies,  German,"  "  Do- 
mination," "  Indemnities," 
"  Poland,"  "  Schleswig-Hol- 
stein,"  "Triple  Alliance" 
Great  Britain  : 

her  part  in  the  war  and  the  set- 
tlement, 7 

relations   with    Germany,    36-39 

entente  with  France,  37 

supports     France     in     Morocco 
crisis,  38 

and  the  outbreak  of  war,  39-40 

attitude  to  Holy  Alliance,  58 

policy  at  Congress  of  Vienna,  59 

protests    against    annexation   of 
Cracow,  94 

protests    against    withdrawal    of 
Polish  constitution,  96 

agreement    with    France    as    to 
Colonies,   168 

See     also     "British     Empire," 
"  Egypt,"      "  India  " 
Greece  : 

and  Epirus,  125-126 

claim  to  ^Egean  Islands,  145 

interests  in  Smyrna,  196 
Grey,  Sir  Edward  : 

at  London  Conference  1912,  38 

on  Concert  of  Europe,  259-260, 
263 
Guarantees  : 

of  Belgium,  37,  40 

value  and  limitations  of,  66-67 

mutual,  against  aggression,  266- 
268 


Herreros.     See    "  German     South- 

West   Africa  " 
Hohenzollern  House  : 

symbol  of  German  hope3   after 
Jena,  48 

in  Roumania,  120-130 

philosophy  of  force,  251 
Holland,  pan-Germans  and,  38 


Holy  Alliance  : 

principles  of,  57-58 
Castlereagh  on  principles  of,  58 
attitude  of  Great  Britain  to,  58- 
59 

Hungary.       See       "  Austria- Hun- 
gary " 

Iceland,  law  and   the  community 

in,  278 
Indemnities  : 

complexity  of  question,  208 

motives  of,  209 

in  present  war,  209-211 

could  Allies  recover  cost  of  war, 

2 1 1-2 14 
capital  levies,  213-214 
instalments,  214-215 
political  effects  of,  215,  220-223 
pledges  for  payment  of,  215-216 
effects  on  money  markets,  216- 

217 
Franco-German,    217-218,    291- 

300 
loans  for,  218-219 
partial  recoupment  by,  219-220 
and  German  armaments,  223 
economic  effects  of,  224-227 
by  issues  of  stock  or  confiscation 

of  investments,  227-229 
and  repudiation,  229-230 
compensation  to   Belgium,   23c— 

233 
restoration  of  devastated  areas, 

233 
India  : 
Constantinople  and  the  route  to, 

139 
and  German  East  Africa,  186 
work  of  Great  Britain  in,  194 
economic  advantages  of  connec- 
tion with,  207 
British  policy  in,  207 
Istria.     See  "  Coastland,"  "  Pola," 

"  Trieste  " 
Italy  : 
declaration  of  neutrality  by,  40, 

41 
and  Dalmatia,  123-125,  144-145 
and  Albania,  123,  125-127 
relations   with   Jugoslavia,    123- 

125,   145.  146-147 
relations  with  Austria,  141-143 
Itahu  irredenta,  142-144 
foreign  policy  of,  14^-144 
and  the  Trentino,  143,  144 


306 


INDEX 


Italy : 

friendship  with  Roumama,  145 
possible   compensations   in   Asia 

Minor,  145 
occupation  of  Greek  islands,  145 
and  Trieste,  145-147 
and  Cilicia,  196 

Japan  and  Kiau-Chau,  191 

Jena,  Battle  of,  effects  in  Germany, 

4,  45 

Jugoslavia  : 
kingdom  of  the  Southern  Slavs, 

118 
possible  constitution  of,  1 18-124 
boundaries  of,  121-124 
the  Slovenes  of  Carniola,  122 
the    problem   of   the   Coastland 

and  Dalmatia,  122-124 
Italy  and,  123-125,  145,  146-147 

Kaiser      Wilhelm's      Land.       See 

"  Pacific,  German  Colonies  in  " 
Kamerun  : 

acquisition  of,  170 

description  of,  179-180 

future  of,  180 
Kiau-Chau  : 

acquisition  of,  170 

description  of,  191 

future  of,  191 
Kiel  Canal,  question  of,  154-156 
Konigsberg  and  the  new   Poland, 

101 
Kossuth,  his  attitude  to  the  Slavs, 

23 

Law,  international : 

and  the  law  of  struggle,  71 
development  of,  277-280 

Leipzig,    Battle    of,    desertion    of 
Saxons  from  Napoleon,  48 

Lewin,  Mr.  Evans,  on  the  scramble 
for  Africa,  169 

London  Conference,  191 3,  co-opera- 
tion of  Britain  and  Germany,  38 

Louis  XIV  : 

beaten  by  united  Europe,  4 
interferes  in  German  affairs,  31 
acquires  Alsace,  148 

LuderitzBay.  See  "  German  South- 
West  Africa  " 

Luxemburg,  suggested  union  with 
Belgium,  152 


Macedonia,  problem  of,  133-135 
Magyars  : 

the  dominant  race  in  Hungary, 
21-22 

reactionary  rule  of,   22-23,    88, 
113,  115-116,  128-129,  157 
Maine,  Sir  Henry,  on  international 

Taw,  279 
Marianne    Islands.   See    "  Pacific, 

German  Colonies  in  " 
Maritz,  Colonel.  See"  South  Africa, 

Union  of " 
Marshall    Islands.     See    "  Pacific, 

German  Colonies  in  " 
Mesopotamia.         See        "Turkey, 

Asiatic  " 
Metternich,  reactionary  influence  of, 

57  . 

Milan,    King,    his   subservience   to 
Austria,  25 

Moldavia.     See  "  Roumania  " 

Monastir     district.     See     "  Mace- 
donia " 

Montenegro,  relations  with  Serbia 
and  position  in  settlement,  127 

Moravia  : 

racial  problems  of,  109,  289 
future  of.     See  "  Czechs  " 

Morocco  Crisis,  1911,  Great  Britain 
supports  France,  38 

Napoleon  : 

beaten  by  united  Europe,  4 
interferes  in  German  affairs,  31 
his  attempt  to  crush  Germany, 

45-47 

German  rising  against,  47-49 

creates  Duchy  of  Warsaw,  94 
Nationality  : 

Congress   of   Vienna   disregards, 
59-61 

definition  of,  61-62 

principle  of,  62-63 

and  Empire,  63-64 

and  democracy,  64 

and  European  peace,  64-65 

and  autonomy,  65-66 

and  guarantees,  67 

and    strategical    considerations, 
72-73 

difficulties  in  applying  principle 
of,  84 

geographical  andeconomic  factors 
and,  85 

protection   of   minority   popula- 
tions, 162 


INDEX 


307 


Neutrals,  should  they  have  a  voice 
in  the  settlement  ?    74-76 

New  Guinea,  German.  See 
"  Kaiser  Wilhelm's  Land  " 

New  Zealand  and  German  Pacific 
Colonies,  177,  188,  190 

Outrages,  possible  inquiry  into,  2*0 

Pacific,  German  Colonies  in  : 
acquisition  of,  170 
description  of,  187-190 
operations  against,  190 
future  of,  190 

Australia  and  New  Zealand  and, 
190 

Palestine.     See  "Turkey,  Asiatic" 

Patents  and  "  licences  to  manu- 
facture," 243 

Peace  : 
essentials  of  a  permanent,  6 
desirable  in  itself,  248-249 

Pelew  Islands.  See  "  Pacific,  Ger- 
man Colonies  in  " 

Phillips,  Mr.  Alison,  quoted,  255 

Plebiscites  : 

in  Alsace-Lorraine,  150,  152 
in  Schleswig-Holstein,  154 
difficulties  of,  161 

Pola,  Austrian  naval  base,  146 

Poland  : 

and  German  politics,  56,  105 
partitions  of,  93-94 
history  of  Russian,  94-96 
population  of  Russian,  96 
history  of  Austrian,  96-97 
character    of    Prussian    rule    in, 

97-98 
Russian  proclamation  to,  98 
frontiers  of  the  new,  100-103 
prospects  of  the  new,  103-105 

Police,  international,  impractic- 
ability of,  67,  275 

Policy  of  nations,  shifting  character 
of,  4-5 

Pollock,  Sir  Frederick,  on  law  of 
nations,  277-278 

Posen.     See  "  Poland  " 

Prussia  : 
recovery  after  Jena,  4 
policy  of.  in  eighteenth  century, 

3i 
and  unification  of  Germany,  32 
militarist  traditions  of.  3i 
military    caste    must    be    discre- 
dited, -)3 


Prussia : 
state  of,   after   Peace  of  Tilsit, 

4  5-46 
renaissance  of,  47-49 
South  Germans  and,  51,  157 

Prussianism  : 
revolt  against,  2 
See  also  "  Domination  " 

Rose,  Dr.  Holland,  quoted,  198 
Roumania  : 

history  and  policy  of,  129-130 

possible  intervention  of,  130-132 
Roumanians  (in  Austria-Hungary), 

problems  of,  127-133,  290 
Rush-Bagot  Treaty,  as  a  precedent, 

283 
Russia  : 

fear  of  Russia  has  led  to  support 
of  Austria,  26 

conflict  of  policy  with  Austria  in 
Balkans,  28-30 

Balkan  policy  of,  28-29 

protests    against    annexation   of 
Bosnia- Herzegovina,  30 

conflict  of  policy  with  Germany, 

36 

and  the  outbreak  of  war,  39-40 
denounces  treaty  of  1856,  49 
proclamation  to  Poles,  98 
German  influence  in,  99 
and  decentralisation,  99,  107 
annexation  of  Galicia,  107 
and  Jugoslavia,  121 
Roumania  and  Bessarabia,   129, 

130,  132-133 
German  fear  of,  257-258,  271 
See  also  "  Constantinople,"  "  Po- 
land,"    "  Ruthenes  " 
Ruthencs  : 
sacrificed  to  Poles  by  Austria,  97 
in  Galicia  and  Bukovina,  106,  289 
problem  of,  107-109 
in  Austria-Hungary,  290 

Salonika,  economic  importance  of, 

136 
Samoa,     German.     See     "  Pacific, 

German  Colonies  in  " 
Savaii.     See  "  Samoa,  German  " 
Scharnhorst,   his  reorganisati'  a  of 

Prussian  army,  48-49 
Schleswig-Holstein,     problem     of, 

153-156 
Scutari,  Montenegrin  claim  to,  127 


308 


INDEX 


Sea,  roads  to  : 

economic  importance  of,  242 

See  also  "  Fiume,"   "  Salonika," 
"Trieste  " 
Sebastopol,  Russia  denounces  treaty 

relating  to,  49 
Serajevo,  murder  of  Archduke  at, 

17 
Serbia  : 

Austrian  ultimatum  to,  18 

her  case  against  Austria,  20 

Austrian  policy  with  regard  to, 
24-26 

tariff  war  with  Austria,  25 

war  of  1885  with  Bulgaria,  25 

and  the  outbreak  of  war,  40 

as  leader  of  the  Southern  Slavs, 
n6,  117-118,  119 

record  and  future  of,  1 19-120 

Concordat  with  the  Vatican,  121 

need  of  a  sea  coast,  123 

and  Montenegro,  127 

See     also     "  Balkan     League," 
"Bulgaria,"  "Jugoslavia" 
Serbs.     See  "  Southern  Slavs  " 
Ships,    interned,    confiscation    of, 

242-243 
Silesia,  Prussian.     See  "  Poland  " 
Slave  Trade,  abolition  of,  80 
Slovaks  : 

relation  to  Czechs,  113 

future  of,  113 

in  Austria-Hungary,  290 
Slovenes.     See  "  Southern  Slavs  " 
Smyrna,  Greek  interests  in,  196 
Social     Democrats,      opposed     to 

Prussian  militarism,   51-52 
Solomon     Islands.     See    "  Pacific, 

German  Colonies  in  " 
South  Africa,  Union  of: 

British  and  Dutch  united  in,  14 

and  German  South- West  Africa, 
182-185 

rebellion  of  De  Wet  and  Maritz, 
183 
Southern  Slavs : 

distribution  of,  113-114,  289,  290 

condition  of,  in  Austria- Hungary, 
115-116 

growing    unity    of    Serbs    and 
Croats,  116 

aspirations  of,  116-120 

autonomy  not  now  acceptable  to, 
120 

problem  of  religions,  121 

the  Slovenes  and  Jugoslavia,  122 


Southern  Slavs : 

problem  of  the  Coast  provinces, 

122-125,  146-147 
See    also    "  Bulgaria,"     "  Jugo- 
slavia," "Montenegro,"  "Ser- 
bia " 
Spain,  ruinous  colonial  policy  of, 

166,  205,  207 
Strategy  : 

and   annexation   of  Alsace,    35, 

149, 
in  relation  to  policy,  71-72,  159- 

160 
rectification  of  frontiers,  72-74 
importance  of  Valona,  126 
the  question  of  Constantinople, 

139-140 
the  Adriatic  question,  146 
the  question  of  coaling  stations, 

174-175 
operations  against  German  colo- 
nies, 175-176 
Struggle,  law  of : 

in  relation  to  the  theory  of  domin- 
ation, 9-1 1 
incompatible  with   international 
law,  71 
Sums  held  in  trust,  confiscation  of, 

242-243 
Switzerland  : 

Union  of  races  in,  21,  62 
Italians  in,  142 
Syria.     See  "  Turkey,  Asiatic  " 

Thrace.     See  "  Bulgaria  " 
Tilsit,  Treaty  of : 

effects  in  Germany,  46 

real  result  of,  49 
Times       Military      Correspondent 

quoted,  50 
Togoland  : 

acquisition  of,  170 

description  of,  178 

future  of,  179 
Transylvania.     See  "  Roumanians" 
Trentino,  problem  of,  141-144 
Trieste  : 

problem  of,  141,  143,  145-147 

economic  relations  of,  146-147 
Triple  Alliance  : 

effects  on  Balkan  policy,  30 

Dual  Alliance  formed  to  balance, 
35 

Italy  refuses  to  support,  40 

Italy  and,  142,  143 

and  the  Triple  Entente,  263 


INDEX 


309 


Turkey  : 

Russian  and  Austrian  policy  to- 
wards, 28-29 

Young  Turk  revolution,  30 

doom  of,  138 
Turkey,  Asiatic  : 

German  designs  on,  35-36 

Possible  break-up  and  problem 
of,  195-199 

Arab  national  movement,  196 

Russia  and  Armenia,  196 

France  and  Syria,  196 

Italy  and  Cilicia,  196 

Greece  and  Smyrna,  196 

a  Jewish  Palestine,  196 

the  question  of  Mesopotamia,  198 
Tyrol.     See  "  Trentino  " 

Ukraine,  the  Ruthenes  and,  106-107 
United  States  and  the  community 

of  nations,  284-285 
Upolu.     See  "  Samoa,   German  " 

Valona,    strategic   importance   of, 

126-127 
Venetia,  acquired  by  Italy  in  1866, 

141 
Vienna,  Congress  of : 

its  achievements  and  reasons  of 
its  failures,  57-61,  65 

and  abolition  of  Slave  Trade,  80 


Vienna,  Congress  of : 

errors  of,  82 

extinguished  Duchyof  Warsaw,  94 

Alexander  I  and,  254 

Mr.  Alison  Phillips  (>n,  255 
Vistula,   River.     See  "Poland" 

Walfisch   Bay  and  German  South- 
West  Africa,  185 

Wallachia.     See  "  Roumania  " 

War: 

preparation  for,  does  not  avert,  6 
is  it  inevitable  ?  6 
root  causes  of,  8 
issues  of  the  present,  15,  249 
few  advocates  of  war  for  war's 
sake,  248 

Warsaw,  Duchyof.     See"  Poland" 

Wellington,  Duke  of,  quoted,  44 

Westphalia,  Kingdom  of,  formed  by 
Napoleon,  46 

West  Prussia.     See  "  Poland  " 

Zollverein,  German,  paved  the  way 

to  political  union,  32 
Zollvereins  : 

value  of,  66 

possible  Balkan  Zollverein,   138, 

145 
suggestion  of  an  allied,  235,  237- 

239 


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HAZBLL,    WATSON    AND    VINEY,    LD. 

LONDON   AND    AYLESBURY, 

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